You can reduce Class 4 NIC liability so that the excess earnings are charged at 2% if one of the following is true:
To reduce the Class 4 NIC liability if eligible, follow these steps.
Please note column D is from your P60
|
Example |
|
|
Employment income |
£50,000 |
|
Partnership income |
£20,000 |
|
Class 1 NIC deducted at source |
|
|
Earnings up to upper limit (A x B = C) |
£4,192.80 |
|
Earnings over limit (D x E = F) |
£330.20 |
|
£4523.00 |
|
|
Class 4 NIC entered in box 4 (Tax Calculation pages) |
|
|
Earnings over threshold ((20,000 – G) x H = I) |
£238.80 |
A
The following tables show rates and allowances for previous years.
|
Tax year |
Earnings up to upper limit (*A) |
Percentage charged (B) |
Class 1 NIC payable at initial charge (C) |
Earnings above upper limit (D) |
Percentage charged (E) |
Class 1 NIC payable at additional charge (F) |
Lower limit (G) |
Chargeable rate (H) |
Class 4 NIC Due (I) |
|
2016–17 |
£34,940 |
12% |
£4,192.80 |
£15,060 |
2% |
£342.20 |
£8,060 |
2% |
£238.80 |
|
2015–16 |
£34,325 |
12% |
£4,119.00 |
£15,675 |
2% |
£330.20 |
£8,060 |
2% |
£238.80 |
|
2014–15 |
£33,909 |
12% |
£4,069.08 |
£16,091 |
2% |
£321.82 |
£7,956 |
2% |
£240.88 |
|
2013–14 |
£33,695 |
12% |
£4,043.40 |
£16,305 |
2% |
£326.10 |
£7,755 |
2% |
£244.90 |
|
2012–13 |
£34,870 |
12% |
£4,184.40 |
£15,130 |
2% |
£302.60 |
£7,605 |
2% |
£247.90 |
|
2011–12 |
£35,250 |
12% |
£4,230.00 |
£14,750 |
2% |
£295.00 |
£7,225 |
2% |
£255.50 |
|
2010–11 |
£38,160 |
11% |
£4,197.60 |
£11,840 |
1% |
£118.40 |
£5,715 |
1% |
£142.85 |
|
2009–10 |
£38,160 |
11% |
£4,197.60 |
£11,840 |
1% |
£118.40 |
£5,715 |
1% |
£142.85 |
|
2008–09 |
£34,605 |
11% |
£3,806.55 |
£15,395 |
1% |
£153.95 |
£5,432 |
1% |
£145.68 |
|
2007–08 |
£29,615 |
11% |
£3,257.65 |
£20,385 |
1% |
£203.85 |
£5,225 |
1% |
£147.75 |
|
2006–07 |
£28,505 |
11% |
£3,135.55 |
£21,495 |
1% |
£214.95 |
£5,035 |
1% |
£149.65 |
|
2005–06 |
£27,865 |
11% |
£3,065.15 |
£22,135 |
1% |
£221.35 |
£4,895 |
1% |
£151.05 |
|
2004–05 |
£26,975 |
11% |
£2,967.25 |
£23,025 |
1% |
£230.25 |
£4,745 |
1% |
£152.55 |
A
|
* How "A" is calculated (Earnings up to upper limit) |
|||
|
Tax year |
Upper profit limit |
Lower profit limit |
Difference (A) |
|
2016-17 |
£43,000 |
£8,060 |
£34,940 |
|
2015/16 |
£42,385 |
£8,060 |
£34,325 |
|
2014/15 |
£41,865 |
£7,956 |
£33,909 |
|
2013/14 |
£41,450 |
£7,755 |
£33,695 |
|
2012/13 |
£42,475 |
£7,605 |
£34,870 |
|
2011/12 |
£42,475 |
£7,225 |
£35,250 |
|
2010/11 |
£43,875 |
£5,715 |
£38,160 |
|
2009/10 |
£43,875 |
£5,715 |
£38,160 |
|
2008/09 |
£40,040 |
£5,435 |
£34,605 |
|
2007/08 |
£34,840 |
£5,225 |
£29,615 |
|
2006/07 |
£33,540 |
£5,035 |
£28,505 |
|
2005/06 |
£32,760 |
£4,895 |
£27,865 |
|
2004/05 |
£31,720 |
£4,745 |
£26,975 |
From 2015/16 onward, you are no longer able to defer Class 4 NIC. For additional information on this, please see How to defer class 4 NIC?