National Insurance Flashcards
What is the criteria for benefits in kind to be counted as earnings for NI purposes?
Must be easily convertible to cash
True or false? Employers don’t have to pay NI on P11D benefits.
False
What is employment allowance?
Allows £5,000 to be deducted from total secondary class 1 NICs liability
Name the conditions or a company to qualify for employment allowance.
-Can’t have the director as the sole employee
-Must have total employer NI bill of <£100,000 in the last tax year
What types of employee does an employer not have to pay Secondary Class 1 NICs up to the UEL on?
-All employees aged under 21
-Apprentices under 25
When do class 1A NICs liabilities have to be paid by?
22nd July following the end of the tax year in which they fell due
What categories of work are classed as employed for NICs purposes, but not for income tax purposes?
CARTEL:
-Cleaners for offices & domestic workers
-Agency workers
-Religion - ministers
-TV & film industry workers
-Education - lecturers and instructors
-Labour-only subcontractors
What is the reduced rate for married women?
-Women married before 6/4/1977
-Could elect to pay 5.85% NICs rate on main band earnings
-Reduced entitlement to state benefits
When does the reduced rate for married women stop?
-Divorce
-Remarriage
-Two consecutive tax years with no earnings above LEL
In which situations are an individual’s contributions record credited as if minimum contributions had been paid?
-Full-time training
-Entitlement to statutory maternity paternity & adoption pay
-Unemployment/sickness
-When registered to receive CHB for a child under 12
-In receipt of carer’s allowance
-Jury duty
-Wrongly imprisoned & conviction quashed by Court of Appeal
What is the difference between class 2 and class 4 NICs?
Class 2 builds up STP provision whereas class 4 is earnings-related
How do fishermen’s NICs differ from other self-employed individuals?
Pay higher rate of class 2 NICs so they’re able to claim JSA
What residency conditions apply for class 2 NICs to be liable for the self-employed?
-Must be UK resident
OR
-UK resident for at least 26 weeks before the relevant contribution week
Why might a non-UK resident continue paying Class 2 NICs?
To maintain STP entitlement
Where there are no double-taxation agreements in place, how do HMRC treat NICs for a worker employed in multiple countries?
Leaving the UK - usually collect NICs for 52 weeks
Coming to the UK - if clear-cut HMRC try to collect primary NICs immediately. If not, they usually wait 52 weeks.
