Class4 NIC on 2 separate self employments, one making a loss

Class4 NIC on 2 separate self employments, one...

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If an individual has 2 separate self employed businesses, one showing a profit of say £15k and the other a loss of say £6k, then the loss can be offset against the profit for tax purposes, but can it be offset for Class 4 NIC purposes ?

On the above scenario no tax would be payable as covered by PA, but is NI payable on business 1 on the £15k less the usual NI exemption, or can the £6k loss be offset and NI is then payable on £9k less the usual exemption ?

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By Tim Vane
28th Jan 2016 11:10

You can enter an adjustment on the return for NIC4 losses (box 102). See HMRC helpsheet 220.

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By Portia Nina Levin
28th Jan 2016 11:14

Yes. You calculate Class 4 NIC on the aggregate position of the two self-employments.

Any loss that is left over can be carried forward for Class 4 NIC purposes. HMRC consider that the loss can only be carried forward against profits of the same trade, but that is not what the legislation says.

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By richyrichthe3rd
28th Jan 2016 11:21

Thank you very much Tim and Portia

Thank you for the ultra quick responses

Cheers

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