National Insurance Contributions (NICs)?
We provide standalone personal services for businesses and individuals who need assistance with their tax and investment affairs.
FWD can help you with every aspect of National Insurance Contribution (NIC) and help you get on with the things that matter. Everyone between the age of 16 and state pension age who’s working pays NIC to HMRC. As a self-employed person, you pay less National Insurance than if you were an employee.
What are National Insurance Contributions (NICs)?
Once you reach State Pension age, National Insurance contributions (NICs) stop under different rules depending on your employment status. Employees stop paying Class 1 NICs immediately from their next payday. For the self-employed, Class 2 NICs (now abolished as of April 2024) previously ceased at State Pension age, while Class 4 NICs continue until the end of the tax year in which you reach that age. The State Pension age is currently 66 for both men and women and is gradually increasing to 67 between 2026 and 2028. You can check your exact State Pension age using the GOV.UK calculator. Importantly, even after stopping NICs, you may still need to pay Income Tax if your earnings exceed the personal allowance.
If you are Self-Employed
If you are self-employed you pay Class 2 and Class 4 NICs. The rates are:
Class 2 NICs (2024/25)
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Abolished from 6 April 2024 – No more weekly flat-rate payments.
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But if your profits are below £6,725, you won’t pay Class 2 NICs, but you may voluntarily pay to protect your State Pension and benefits.
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If your profits are £6,725 or more, you automatically get NIC credits (no payment needed).
Class 4 NICs (2024/25)
- Main rate: 6% (reduced from 9% in 2023/24) on profits between £12,570 – £50,270.
- Additional rate: 2% on profits above £50,270.
- Paid alongside Income Tax via Self Assessment.
Register with HM Revenue & Customs (HMRC)
It’s important to let HMRC know that you are self-employed as soon as possible, even if you already fill in a tax return each year. If you don’t tell HMRC as soon as you begin self-employment you may have to pay an initial penalty.
Please contact FWD if you would like any support with NIC.