Class 2 national insurance

Class 2 national insurance

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Hello everyone,

Any help on this question will be greatly appreciated. 

I have got myself very confused regarding class 2 national insurance. 

I am currently employed and in bracket 2 for income tax and I am now looking to set up a small part time business (sole trader) and the profits I make from my business will be under £5,695; 

Does this mean that I will be exempt from class 2 NIC? Or because my total earnings (from employment & sole trader business) will be above the threshold will I have to pay class 2 NIC? 

Thanks 

Will 

Replies (7)

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By Sherman Holter
09th May 2015 13:06

 Correct

 

Assuming your sole trade does actually make a profit at the level stated then you will pay no Class 2 or Class 4 National Insurance.

With regard to the tax however, if you're a higher rate tax payer then the whole profit will be taxed at the higher rate.

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By Marion Hayes
09th May 2015 13:52

\Need to claim

Small earnings exception must be claimed as it is not the same as exemption and there is a time limit.

Thanks (0)
RLI
By lionofludesch
09th May 2015 15:42

Things change

Agree with Basil.

In any case, one has been able to claim SEE in arrears for about 25 years now. Prior to some ill-remembered date, you had to claim before the start of the year or on commencement.

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By Marion Hayes
09th May 2015 20:33

Thanks Basil

That aspect of the change had completely passed me by.

Lion-I had a late notification case a few years ago where late application was refused.

 

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Replying to lesley.barnes:
RLI
By lionofludesch
10th May 2015 09:09

Really

Marion Hayes wrote:

Lion-I had a late notification case a few years ago where late application was refused.

Really ?  On what grounds ?

I can't say I've had a huge experience in this - but I have obtained refunds for contributors on at least two occasions that I can bring to mind.

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By Ned Ludd
13th May 2015 10:20

Claims refused
The only retrospective exemption claims I've had refused were where the client had already paid the class 2.

Other than that never had a problem

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RLI
By lionofludesch
13th May 2015 19:50

Changed

I was pretty much sure that the law was changed about ten years ago to permit repayments but I'm abroad in Berwickshire at the moment and can't check.

Amazed HMRC make a fuss over £150 or so.

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