Whether you’re a contractor, freelancer or run your own small business, there are a great deal of upsides to being self-employed. But we’re not going to lie - the additional admin isn’t one of them! As much as being self-employed affords more freedom and control than working for a company, it does mean you have to sort out a bunch of extra paperwork - as if you didn’t have enough to do already! There’s your self assessment tax returns, sorting out your own pension, and doing your own national insurance payments. Now let’s find out how to sort out the latter.
How much national insurance do I have to pay?
There are a few classes of national insurance contribution (NICs) that you can make, depending on your profits. Self-employed people tend to fall into class 2 or class 4 - but what does this mean? Well, we’ll show you:
How do I make national insurance contributions?
Now for the fun part - paying your NICs! You need to your pay NICs to the folks in charge, Her Majesty’s Revenue & Customs (HMRC). Most NICs are made in your self assessment, meaning you pay it at the same time as your income tax. Generally speaking, your NICs will be due at the end of January for any contributions you owe based on the previous tax year.
You’ll be pleased to know that the payments can all be done online via the HMRC website. The payment can be made by a one-off direct debit, bank transfer, or by credit/debit card. Easy peasy!
By the way, if you’re considering going it alone, we’ve listed some of the pros and cons of going self-employed here.
Are there any exceptions?
Yep, there are some exceptions - it was never going to be straight forward! HMRC have outlined different rules for certain jobs. With some professions, you can make voluntary contributions, rather than doing so in your tax return.
The professions are as follows:
You can read more about making voluntary NICs here.
Not thrilled by the idea of filling out your tax return?
Very few of us are. But here’s some good news… We offer a simple, easy-to-use accountancy service here at Mazuma. And we’re more than happy to help you out with your tax affairs, including your self assessment tax return. Contact us to find out how we can help - with no obligation whatsoever - and for more information about our services.