What are National Insurance contributions in the United Kingdom and who has to pay them? How do taxpayers pay it? How much do they have to pay?
1. What Are They- National Insurance contributions are paid by people. They pay them in order to qualify for various benefits, such as State Pension. Some other benefits include a state pension, maternity allowance and bereavement benefits.
2. Who Makes The Contributions – National Insurance are payable by employees, employers and the self employed. For example, if you are an employee who earns more £155 per week, you may be liable. If you are self employed and your net profits were £5,965 or more in a tax year, you may have to pay them. UK citizens and residents need to have a National Insurance number before they can make contributions.
3. How Much Do You Pay- There are various factors that play a role in how much is payable towards National Insurance. Generally, the amount payable will depend on your profits if you are self employed. For the employed, the national insurance contributions depends on the pay . Rates may change when the tax year changes.
People who tend to pay less include those who are a widow or a married woman with a certificate of election. Having a valid a valid small earnings exemption may result in less national insurance. People also pay less if they have more than one job.
Aside from the above, there are a number of National Insurance rules. These include directors of a company, as well as landlords who run a property business. If you fall into either of these categories then you may want to consult a small business accountant who has specialised knowledge in these areas.
4. How to Pay- There are a number of ways on how National Insurance can be paid. If you work as an employee then your employer will take your payments before you receive your pay. In this case your payslip will show how much you paid . If you have a payroll because you are a director of a limited company, then you may pay it through that.