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National Insurance
What National Insurance will I have to pay if I am self-employed?
You will pay:
- Class 2 contributions at a flat weekly rate (£2.40 for tax year 2009-10)
- Class 4 contributions as a percentage of your taxable profit
If your earnings are expected to be less than a certain amount (£5,075 for tax year 2009-10), you may not have to pay any Class 2 contributions. This is known as the ‘small earnings exception’ or ‘SEE’.
You must keep your tax and National Insurance records for five years.
What National Insurance will I have to pay if I set up a limited liability partnership?
Members of a limited liability partnership must pay Class 2 and Class 4 National Insurance contributions.
What National Insurance will I have to pay if I set up a limited liability company?
Company directors are classed as employees and must pay Class 1 National Insurance contributions.
What National Insurance will I have to pay if I set up a franchise or social enterprise?
This will depend on the legal structure of your business.
What National Insurance will I have to pay for employees?
You are legally responsible for sorting out the National Insurance contributions of employees. You will also need to keep detailed National Insurance records.
You should take your employees’ Class 1 National Insurance contributions directly from their salary, and pass these payments to HMRC.
Where can I get more information?
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