National Insurance

Self-employed people must pay two types of National Insurance.

  • Class 2 National Insurance – which is basically social security,
  • Class 4 National Insurance – which is payable for the profit above a certain threshold.

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Self-employed people must pay two different types of NI.


  • Class 2 National Insurance

  • Class 4 National Insurance



Class 2 National Insurance

As a self-employed person, you are liable to pay National Insurance Class 2, the amount of which is:

2019-2020 £ 3.00 / week
2018-2019 £ 2.95 / week

 

You will have the opportunity to pay the NI Class 2 as part of the Self Assessment.

Since the exact payable amount which shall be paid electronically with your calculated tax will be calculated retrospectively during the preparation of your Self Assessment.

Should you have a tax refund, the system will settle the amount of the Class 2 National Insurance from the refund amount, and only the refund amount decreased by the NI will be credited to you.

Class 2 National Insurance is payable even if you work as an employee besides being self-employed, and the employer also deducts the National Insurance from your salary.

If your profit from self-employment does not exceed the Small Profits Threshold, then you don’t have to pay the Class 2 National Insurance amount.

Small Profit Thresholds are the following:

2019-2020 £ 6,365.00
2018-2019 £ 6,205.00

 

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Class 4 National Insurance

Class 4 National Insurance contribution shall be paid for the calculated profit, and its rate depends on this amount.

Class 4 National Insurance contribution is calculated and submitted with the Self Assessment, and they must be paid together (should you have any refunds, it will be deducted from the amount to be refunded).

Payable Class 4 National Insurance rates:

You will not be entitled for subsidies provided by the state by paying Class 4 National Insurance.