Business & Finance

Confused about National Insurance

I registered as Self-Employed at the beginning of the year, as I had starting trading as a complementary therapist, and have just received a NI bill for the period from Jan to April for £22. During this time I only earned £30 so should I really have to pay £22???

Also I have just started a PAYE job aswell, so will I need to tell the NI office, as I don't want to pay twice.

Please help as I'm very confused

scoobysoo Thurs 01/05/08 17:39

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hev
Thurs 01/05/08
18:13

Call them and tell them your earnings you should be exempt for that bit. If you are self employed and employed you do have to pay NI for both incomes. Its 11% for PAYE (class 1)and a set £2.60 per week (class 2) and a further 8% on any profit you make( class 4) that is added to your tax bill under self assessment each year. If you think your income from self employment is going to be low let them know you should be exempt as a low earner.

scoobysoo
Thurs 01/05/08
18:17

Question Author

Thanks hev. I have a few other queries so will get all my figures in order tonight, and phone them in the morning

Skyline D
Fri 02/05/08
14:00

Yes, there's a de minims limit for self employed NIC. In the last tax year it was £4,635. Don't have access just now to the current year figure. If self employed earnings will be less than that you can apply for exemption. I did!

crix1234
Thurs 08/05/08
22:10

Self Employed National Insurance is a flat weekly rate National Insurance, irrespective of how much you earn from your self employment. So if you earned £30 or £30,000 since January, you still have a liability to pay the £22.00 bill (10 weeks @ £2.20). In the 2007/08 tax year the weekly rate was £2.20. In year 2008/09 year the weekly rate is £2.30.
If you are both employed (PAYE) and self employed, you must pay both types of National Insurance. However if your self employed income is expected to be low, you can claim Small Earnings Exception. This must be applied for as it is not automatically awarded. The claim form is here on the HMRC website.. http://search2.hmrc.gov.uk/kbroker/hmrc/forms/ viewform.jsp?formName=CF10
Print off the form and send it to the address given.

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