Accountants London - National Insurance Services

National Insurance

National Insurance was introduced to protect members of the UK population who fall upon hard times and is paid by the employed, employers and the self-employed.

There are currently six classes of contribution, the type of contribution payable (and benefit entitlement available) depends on whether the contributor is in employment, self-employed or is contributing voluntarily.

Our services include:

• Class 1 is paid by individuals in employment and is collected via the PAYE system. Employers also pay Class 1.
• Class 1A is paid by employers on the provision of most benefits.
• Class 1B is paid by employers in respect of items included within a PAYE settlement agreement.
• Class 2 is paid by the self-employed, it is a flat rate contribution usually paid by direct debit.
• Class 3 is a voluntary contribution usually paid by direct debit, these may be paid to preserve benefit entitlement.
• Class 4 is paid by the self-employed, it is profit related and collected through the self-assessment system.

Minimising national insurance

There are various strategies that could help you pay less NIC's. For example, if you are an owner-director, you could pay yourself dividends rather than bonuses to save both employee and employer Class 1 NIC's. The decision to pay a dividend or not is complex and requires careful consideration, it could be challenged by HM Revenue and Customs and there is a maximum amount that may be paid. Contact us if you would like further help or information on this subject.

PAYE & NIC inspection

Compliance officers have wide powers with regard to monitoring and the enforcement of NIC’s and you are now more likely than ever to be subject to a full review of your compliance systems and procedures. Interest and penalties are due on top of any NIC liability if it paid late. If you would like to ensure you are not vulnerable, contact us now.