Class 4 National Insurance Guide
What is Class 4 National Insurance ?
If you are Self-Employed
you normally have to pay Class 4 National Insurance contributions if your profits are over a certain amount.
However there are circumstances when you may be exempt from paying, or pay a reduced amount, as described further down the page.
We will help you with your Class 4 NI as part of the Self Assessment process.
do not pay Class 4 NI. Please visit our webpage to help you decide whether to trade as a Sole Trader or Limited Company
Class 4 NI Rates – How much is payable ?
The amount of Class 4 NI contributions you have to pay for any tax year is based on your profits for that year.
For the tax year 2016/17 (6/4/16 to 5/4/17):
• 9% on business profit between £8,060 and £43,000
• 2% on business profit over £43,000.
For the tax year 2017/18 (6/4/17 to 5/4/18):
• 9% on business profit between £8,164 and £45,000
• 2% on business profit over £45,000.
This is in addition to Income Tax
How is Class 4 NI Paid ?
Class 4 NI contributions are calculated as part of Self Assessment
tax return and are normally paid at the same time as Income Tax
If you have more than one business, special rules apply for calculating adjustments to profits on which you pay Class 4 National Insurance contributions.
Class 4 NI can also be deferred if you are also in employment.
Class 4 NI Deferment
Class 4 NI contributions can be deferred for certain people by completing Form CA72B. This can typically happen if you have a full time job as well as being self-employed. In these circumstances it is possible that you may only need to pay 2% instead of the 9% in the bands above.
Exceptions from Class 4 National Insurance contributions
There are exceptions from the rule in the case of the people who have to pay Class 4 National Insurance contributions, including:
• under 16 years old
• those who are still working in the tax year after the tax year in which you reach State Pension.
Government and HMRC Webpages
HMRC: Class 4 National Insurance contributions
Gov.UK: National Insurance Overview
Gov.UK: Self-employed National Insurance rates
HMRC: Self-employed tax and National Insurance