Any self-employed person who has more than one source of self-employment is required to pay Class 4 National Insurance Contributions (NICs) on their total taxable profits. Class 4 NICs are paid by the self-employed as a percentage of annual taxable profits.
Class 4 NICs currently apply on assessable profits from £8,164. Between £8,164 and £45,000, NICs are payable at 9%. Any income above the Upper Profits Limit is liable to NICs at 2%.
However, the self-employed may need to adjust the amount of Class 4 NICs they pay in certain circumstances, otherwise they may overpay their NIC liabilities. See planning note below.
The self-employed may be able to reduce their Class 4 NIC liability if:
If you are uncertain how these adjustments could be applied to your circumstances, we would be more than happy to help you with the calculations.