Nic4

[Smileyface]

Advice I done my tax return last night I don't earn very much so don't pay tax but it asked me if I was except from playing nic4 I said no and it said I owe £54 for this for the year?
Can anyone help me I have no idea what this is for
Thank you

[Bumble Beez]

http://www.hmrc.gov.uk/working/intro/class2.htm

http://www.hmrc.gov.uk/working/intro/class4.htm

These links may help...
As far as I understand it...you pay a set amount each week for class 2 NIC, £2.75 per week...
If you make a profit over £7956 you pay 9% class 4 NIC on the profit amount.

The exceptions for paying class 4 NIC are if you are under 16, you are still working in the tax year after you reached State Pension or you are not resident in the UK for tax purposes.

Hope that helps a little x

Sarah x

[bunyip]

You should only be paying Class 4 once annual profits reach around £8k.

Whilst all self-employed workers, as a rule, pay Class 2 NI irrespective of income, you can apply for a 'Small Earnings Exemption' from Class 2 (for up to 3 years IIRC) if your profits are low.

This will save money in the short term, but you must consider the longer-term implications. Pensions and other benefits are dependent on your NI contributions being up to date or at a certain level, so do consider both sides of it. :thumbsup:

[Smileyface]

Thank you so much for you reply x