20 October 2009

If you are registered as self-employed then you are required to pay income tax and social contributions. In this article we will be focusing on the Class 2 contributions.

In 2008-09, Class 2 NI Contributions are £ 2.30 per week (if your income is over £ 4,825 per year). These contributions are not taken into account in the State Pension or other benefits, therefore, it is recommended that you make private arrangements for medical insurance, private pension, etc...

Exceptions to pay Class 2 contributions of type

If your income is less than £ 4,825 a year, you can apply for certificate of exception that gives you the opportunity to be excluded from paying these contributions.

How to pay National Insurance contributions?

• Monthly by Direct Debit
• HMRC send invoices for these contributions once every 3 months. These bills are issued in July, October, January and April and must be paid in 28 days to avoid penalties. Methods of payment are: Internet banking if your bank has this feature, cheque or Cash in any post office.

Confirmation of payment or receipt for contributions paid

Tax office does not send a receipt / confirmation of payment automatically but if you paid by:

• electronic payment, eg direct debit, internet banking, then you can confirm by mail from the bank where you hold a bank account.
• Mail or cash at one of the post offices, then you should send an official request to the tax office / HMRC to explain that you require a statement of payment to be issued.

Write to:

HM Revenue & Customs

National Insurance Contributions Office
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

EfficientBooks can assist you with registration for payments by DirectDebit, registering as self-employed or annual tax returns. Contact us HERE for a free consultation with one of our agents or online for more details about the services we offer.