Could someone help me with my tax return, I have just tried to phone them and cant get by the security questions as automated service isnt understanding my accent!
I dont have a high income so believe I dont have to pay nic contributions . I have an exemption certificate for class 2 I think somewhere but is that not scrapped now? I have managed to fill in the section regarding class 2 but when I come to the class 4 part it doesnt mention in the help part that you are exempt if low profit, so do I need an exemption certificate for that ?
Diane
It depends what you mean by low! There are several websites which will help you calculate NI and tax: just google “PAYE calculator”. The direct.gov website should have all the info that you need as well. Remember, NI is calculated weekly, not for the whole year.
Class 2 and class 4 NI contributions are both still in existance (for now they seem to change it every year). If you earn below £5965 you don’t have to pay the class 2 but you can elect to do so if you wish to keep your state pension up to date. If you earn between £5965 and £8060 then you pay class 2 at the rate of £2.80 a week. If you earn over £8060 then you pay 9% on your profits over that (upto a ceiling and then it drops on profits over that) (that all came from HMRC’s website). When I filled out my online tax return earlier this year for the previous tax year it worked out if I owed class 2 or class 4 and there is a check box to tick if you want to elect to pay the class 2 even though you don’t earn enough.
my income is low (cardmaking) so I’ve elected not to pay class 2 .
Its the different part where It asks me if I am exempt from paying class 4 and was going to mark it yes cos dont earn enough for class 4 but do I need an exemption certificate like I had for the class 2?
I don’t recall being asked about class 4 on the online form - it had probably already done the math and realised that I didn’t reach the threshold so skipped that bit. I can’t find any reference to a class 4 NI exemption certificate online so I’m not sure it exists. If you have a small earnings exemption certificate that should (but I am not an expert on this and would advise double checking with the tax office) be sufficient as if you are exempt from class 2 (which is the lower band) then you would be exempt from class 4 (the upper band).
Im no expert either but that’s the way I see it too(re Sashas comment). Im trying to sort out class 2 payment as I pay it voluntarily but Im sure now(on my current form and future forms) the form itself will work out what class 2 needs to be paid if not exempt. Class 4 only needs to be paid if you have high earnings. If you don’t earn enough to pay class 2 it makes sense that you won’t have to pay class 4, Im not sure if any exemption form for it though so maybe its not needed.
… I just found this link in my favourites, it may help. http://www.selfemployeduk.org.uk/guide/class-4-national-insurance-contributions-havetopay/
@GrimmExhibition The online tax return does all the maths for you. I checked the box to voluntarily pay my class 2 and it automatically deducted the amount of tax I’d over paid to give me a revised amount which I then paid online using my unique tax reference number (a 10 digit number that they quote on any correspondence or I think it tells you when you log in to the self assessment thing). All the different ways of paying can be found here https://www.gov.uk/pay-self-assessment-tax-bill/by-debit-or-credit-card-online but you can’t directly pay it from the tax return so need to write down the amount that you need to pay.
Thank you for your help i think maybe the question was for people that earn more than a certain amount and maybe for some reason they are exempt but I will add a note on form to explain my confusion