National Insurance

Question 1

NICs Paid by employer

Answer 1

Class 1 Secondary
Class 1A and Class 1B

Question 2

NICs Paid by employee

Answer 2

Class 1 Primary

Question 3

NICs Paid by Self-employed

Answer 3

Class 4

Question 4

Who is taxed on Class 1 Primary

Answer 4

Employees aged between 16 and state pension age are liable
On gross pay before any deductions (inc cash vouchers)

Question 5

What are the Class 1 Primary Rates

Answer 5

Up to primary threshold 0%
Between PT and UEL 8%
Over UEL 2%

Question 6

What is the primary threshold

Answer 6

Weekly 242
Monthly 1048
Yearly 12570

Question 7

What is the UEL

Answer 7

Weekly 967
Monthly 4189
Annually 50270

Question 8

How to calculate Effective rate of tax

Answer 8

Total income tax and NIC/Total income

Question 9

What is included in Earnings for Class 1 primary and secondary purposes

Answer 9

Salary, bonuses, cash etc
Write off of a benefical loan
Employee personal bills
Mileage rate payments more than 45p per mile (no deduction if less)
Profit element of a round sum/general allowance

Question 10

What is liable to class 1A NICs

Answer 10

Non cash
Car, van, fuel benefits
Beneficial Loan interest
PMI and taxable benefits under salary sacrifice rules
Relocation expenses more than £8k

Question 11

What are the Class 1 Secondary Rates of age of 21 and apprentices over 25

Answer 11

£0 - Secondary Threshold - 0%
Over ST - 13.8%

Question 12

What is the Secondary threshold - age of 21 and apprentices over 25

Answer 12

Weekly £175
Monthly £758
Annually £9,100

Question 13

What is rate for Class 1 Secondary NICs for employees under age of 21 and apprentices under 21

Answer 13

£0 - Upper Secondary Threshold - 0%
Over UST - 13.8%

Question 14

What is the Upper secondary threshold for NICs

Answer 14

Weekly £967
Monthly £4,189
Annually £50,270

Question 15

What is Class 1A rate and what’s it on

Answer 15

13.8% on non cash taxable benefits

Question 16

How much is Employment allowance and who is it available to

Answer 16

Total class 1 secondary NICs reduced by £5k per year

Not available to companies with a single director and no other employees

Question 17

Give a Class 2 overview including when it’s paid and how much

Answer 17

Self Employed

Profits £6,725 or more - Class 2 treated as already paid.

Profits <£6,725 - don’t have to pay but can voluntarily pay to get access to benefits and pension

£3.45 per week

Question 18

What is the Class 4 rate

Answer 18

6% between £12,570 and £50,270
2% thereafter