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NIC on second job

Client already has a first employment paying about £20,000 pa. Therefore is the middle of lower and upper earnings limits.

Second job would pay £10,000 pa. Following the rules sends me to Table A which appears to show that LEL applies again. In other words the £94 per week "free" bit applies to both jobs. Employers NI on second job is thus not £1,280 but only about £600.
Can this be right?

Tony Ball
Anthony Ball

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31st Mar 2006 17:12

Still Confused
2 responses seem to be in conflict.

Just to muddy the waters even more - what if taxpayer has job 1 and 2 each paying £20k per annum and he has a share in a partnership with £10k profit per annum???

Is class 1 NIC somehow "capped" at upper earnings limit on combined earnings?

Is class 1a NIC payable as well as class 1?

Simple answer to an old chestnut - scrap NIC and adjust basic tax rate to compensate.

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31st Mar 2006 22:59

NICS
Neil's reply is the correct one - job by job basis - two lots of relief.
If the Class 1 limit is breached then there is a mechanism for reclaiming the overpayment (Through the SATR I think)
Also exemption from Class 2 & 4 can be claimed.

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By Anonymous
29th Mar 2006 12:20

easy
Stripping away all the twaddle in booklets translates to:
NIC is payable in full at the highest rates possible from bottom up.
So you just add all earnings together from sch E sources 1st, then add sch D1 to the TOP, and work it in layers going up. Obviously you do not get two lots of £0 rates etc.
The effect is that you pay employed rates on max NIC, and the cheapie self-emp rates only on the top bit.
The ‘generous’ relief is that you only pay NIC up to the max. of 32,760 on all NI’able income added together – thanks Gordon….

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By neileg
29th Mar 2006 12:30

Job by job
NI is assessed on a job by job basis unless the employer is the same or a connected business.

So, yes, you get the 'free' band for each job.

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