National
Insurance Contributions
National Insurance Contributions (NIC) are assessed
on earnings and are, therefore, effectively another form of income
tax. With careful
planning, it is sometimes possible to minimise this tax cost,
although consideration has to be given to the potential loss of
state pension and benefits, if insufficient NI contributions are
paid.
Our tax technicians can advise in relation to class
1, class 2, class 3 and class 4 NI contributions. In particular,
clients are often interested in:
- The relative NIC costs of Salary vs Dividends,
- Class 2 and 4 NIC for the self employed,
- NIC and share
options,
- Class 1a NIC on benefits
in kind,
- Saving class 1 NIC by salary
sacrifice for employer pension contributions or childcare
vouchers,
- Paying class 1 NIC quarterly instead of monthly,
- Outsourcing your class 1 NIC calculations to our payroll
bureau service,
- NIC on the speculative development of part of your garden,
Advising HM Revenue & Customs and the Contributions Agency
of your income which is liable to National Insurance Contributions
is principally achieved by completing the employment supplementary
pages of a normal tax return. Clients who are fearful that this
liability may be
investigated by HM Revenue & Customs may wish to consider taking
out our
fee protection insurance.
Most people consider national insurance contributions
as another unwelcome tax. As well as seeking to reduce this cost,
our tax technicians, whom include ex tax inspectors in number,
will prepare all of the necessary paperwork and communicate with
the Inland Revenue and Contributions Agency on your behalf, so
that you have peace of mind that your tax affairs are dealt with
in a timely and professional manner.
Practical Examples of our National Insurance
Contributions Expertise
- Communicating with the Contributions Agency in respect
of a disputed 'gap year' in a client's class 1 NIC record.
- Advising on the relative merits of paying voluntary
class 3 contributions.
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- Calculating the class 1b NIC on a PAYE Settlement Agreement.
- Claiming exception from paying class 1 contributions
on a high earner's income from a second employment source.
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