National insurance
Most people who work have to pay national insurance
contributions (NICs) as well as tax. NICs are
collected by HM Revenue & Customs (HMRC).
The most common of the six classes of NICs are:
- Class 1: paid by people who work as employed
earners, and their employers.
- Class 2 and Class 4: paid by self-employed
people
How to pay: For employers,
NIC payments are paid to HMRC in the same way
as income tax deductions.
HMRC recommends making payments by electronic
transfer, including direct debit, Bacs and internet
or telephone banking.
Large employers (250 or more employees) must
make their payments electronically and these
must be made no later than the 22nd of each month.
The same date applies to medium-sized (between
50 and 249 employees) and small employers (fewer
than 50 employees) who pay electronically.
If payments are made by post, cleared payment
must reach HMRC no later than 19th of the month.
Most self-employed people pay Class 2 NICs,
which are set at a weekly rate of £2.30
in the 2008-09 tax year (£2.40 in 2009/10).
These are paid to HMRC either monthly by direct
debit or by quarterly bill.
For more information, visit http://www.hmrc.gov.uk/individuals/tmanational-insurance.shtml
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