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Post Info TOPIC: National Insurance Bands
Lisa68


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National Insurance Bands
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Hello everyone,

Can anyone tell me how the class 4 NI for self employed is calculated, is it on your Net profit before your personal allowance or on the amount after the personal allowance is taken off. I have checked and the band amount for 09/10 is £5,715 class 4 and I assume anything below is a class 2

Thank you

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semsley


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Normally the Class 2 is taken from the s/e by DD from your bank  on a monthly basis. Then at the end of the year on the self-assessment the class 4 is calculated as 8% on any profit over 5715.

-- Edited by semsley on Friday 17th of September 2010 05:37:23 PM

Flaming transpositions..

-- Edited by semsley on Friday 17th of September 2010 05:38:11 PM

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Lisa68


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Hello Semsley

So is that profits after the personal allowance is taken off or your actuall net profits.

When doing the S.A it asks if your are exempt from paying class 4, so if my net profits are above 5715 before my personal allowance would I say I am not exempt so it would then work out my NI at class 4.

Lisa



-- Edited by Lisa68 on Friday 17th of September 2010 05:54:42 PM

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Peasie


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Your personal allowance has nothing to do with National Insurance - it is for income tax.

You pay Class 4 National Insurance at 8% on any profit between £5,715 and £43,875 and 1% on anything above £43,875 .

Class 2 National Insurance is £2.40 per week and has nothing to do with Class 4 NI.

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Lisa68


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Hi Peasie

Everything is nice and clear now, thank you.

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