National Insurance

Question 1

What factors determine NIC

Answer 1

Employment status
Age
Level of earnings
Residence

Question 2

Who pays class 1 NIC

Answer 2

Enployee and employee

Question 3

Who pays class 2 NIC

Answer 3

Self employed (flat rate)

Question 4

Who pays class 3 niC

Answer 4

Voluntary (flat rate)

Question 5

Who pays class 4 NIC

Answer 5

Self employed (percentage rate)

Question 6

Are NIC paid on shares acquired under approved share schemes

Answer 6

No

Question 7

Are NIC.paid on shares that can be converted to cash under unapproved schemes

Answer 7

Yes

Question 8

Are NIC calculated before or after tax for an employee

Answer 8

Before

Question 9

Can Employer NIC be deducted from profits for tax purposes

Answer 9

Yes

Question 10

What age are NIC payable until for employees

Answer 10

State retirement age

Question 11

What are NIC based on

Answer 11

Pay periods not year

Question 12

What is the primary contribution threshold

Answer 12

£166 per week employees pay class 1 NIC above this level

Question 13

What is the secondary contribution level

Answer 13

£166 per week employers pay class 1 above this level

Question 14

What is the lower earnings limit

Answer 14

£118 per week this is the minimum level of earnings for an employee to be entitled to social security benefits

Question 15

What is the upper earnings limit

Answer 15

£962 per week. Max level of earnings that an employee will pay NOC at the main rate

Question 16

What is the upper secondary threshold for under 21s/ apprentice upper secondary threshold

Answer 16

£963 per week this is the upper limit for 0% employers rate for under 21 and apprentices under 25

Question 17

What is the employer rate of NIC

Answer 17

13.8%

Question 18

What is the main rate of NIC for employees

Answer 18

12%

Question 19

What is the additional primary percentage rate

Answer 19

2%

Question 20

What is the employer allowance

Answer 20

£3000 per year

Deducted from total secondary contributions

Question 21

What is the married women reduced rate

Answer 21

Before April 1977 married women could elect to pay a reduced rate of 5.85% on their earnings between £166 and £962

Question 22

When is married women’s reduction revoked

Answer 22

Divorce, remarriage, earning less than LEL for 2 consecutive tax years and no self employed earnings

Question 23

Are class 1A nIC charged on fringe benefits for employee

Answer 23

No

Question 24

What is the rate of employer class 1 NiC due on fringe benefits

Answer 24

13.8%

Question 25

How long will NICO collect NIC for if employee relocated abroad but the employer is UK based

Answer 25

52 weeks

Question 26

What pay period is used to calculate company directors NIC

Answer 26

Annual earnings period used if paid irregular amounts at irregular intervals. When earnings are paid the total earnings since start of tax year must be considered

Question 27

What are the special categories of employment

Answer 27

Domestic workers, agency workers and lecturers

Question 28

What are the rules for special categories of employment

Answer 28

They may not be employed but will be treated as employee for NIC purposes

Question 29

In what circumstances will the nIc record be credited as if contributions have been paid

Answer 29

Unemployed claiming certain benefits On approved training course Income below pct but above lel Whilst entitled to certain types of statutory pay

Question 30

When can an employee defer paying class 1 NIC

Answer 30

If any of the following apply The employee pays class 1 NoC with more than 1 employer The employee earns more than £962 per week from one job over the tax year The employee earns more than £1128 per week from 2 jobs over the tax year A reduced rate of 2% will apply to the standard rate instead of normal 12%

Question 31

Can NIC be repaid in event of overpayment

Answer 31

No automatic right

Question 32

What is the limit of earnings for a self employed person to be able to choose not to pay class 2 NIC

Answer 32

£6365

Question 33

What rate of NiC gives entitlement to contributory state benefits

Answer 33

Class 2

Question 34

What is the flat rate for class 2 Nic

Answer 34

£3 per week

Question 35

What is the main rate for class 4 Nic

Answer 35

9% on earnings between £8632 and £50,000

Question 36

What is the additional rate of class 4 NIC

Answer 36

2% on self employed earnings over £50k

Question 37

How are class 2 contributions collected

Answer 37

Included I. Self assessment collected on 31st Jan after end of tax year

Question 38

How are class 4 contributions collected

Answer 38

Included in self assessment - w payments on account and a balancing payment

Question 39

What is the maximum amount of contributions for class 1 & 2

Answer 39

£4964.16

Question 40

What is the maximum amount of contributions for 2& 4

Answer 40

£3879.12

Question 41

How long after the tax year to which they relate can class 3 contributions be paid

Answer 41

6 years