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NIC adjustments

Last modified 17:38, 14 Nov 2016
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  • Class 2 National Insurance Contributions (NIC) is a charge levied against self-employed individuals. The payment of these allow individuals to qualify for social security benefits. From the 2016 tax year onwards, the payment of Class 2 NIC has become part of Self Assessment and is now included on the Individual Tax Return.
  • Class 4 National Insurance Contributions (NIC) is a charge levied on the business profits of the self-employed, and on an individual's share of profits made within a partnership. However, it does not entitle the individual to any social security benefits.
  • Class 1 National Insurance Contributions (NIC) are made by employed individuals, and are usually deducted by the employer. From the 2016 tax year onwards, the payment of National Insurance has more closely become part of Self Assessment. As a result, the Class 4 NIC calculation takes account of any Class 1 NIC paid and adjusts the Class 4 figure accordingly.
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CCH Personal Tax

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