NI contributions when employment status changes

NI contributions when employment status changes

Didn't find your answer?

I have a client who is a personal trainer.  For 9 months of the current tax year he was mainly self employed with a couple of classes that he taught at local leisure centres where he was on their payroll; for the last 3 months of the year he has been employed but with a very small number of private clients, so he hasn't completely given up his sole trader business.  What is the procedure for calculating NI due in this situation?  I haven't actually seen his books yet, but I presume he's been paying the flat rate NI contributions throughout the year as a sole trader.

I suspect that he has paid all sorts of strange amounts in PAYE too, since he said that two of the leisure centres had 'asked him for his tax code' when he changed main employer.  Goodness knows what tax code they were using if they were asking the employee for the tax code!!

There's nothing like a challenge!!

Replies (1)

Please login or register to join the discussion.

Euan's picture
By Euan MacLennan
01st Apr 2011 17:13

What is the problem?

As he has been self-employed throughout the year, he should indeed be paying the flat-rate Class 2 NIC of £2.40 a week.  When you prepare his self-employed accounts, you(r software) will work out his graduated Class 4 NIC.

Each employer will have deducted Class 1 primary employee's NIC (assuming he was earning more than the earnings threshold) separately.

If he is anything like most personal trainers, you will not be concerned with him exceeding the maximum NIC payable in a year.

Whatever tax may have been deducted under PAYE will be shown on his forms P45 if he has left or forms P60 if still employed at 5th April 2011.  You will claim it on his tax return against his total liability for the year.

Thanks (0)