Income Tax and National Insurance

Income Tax and National Insurance

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Hi Guys

Merry Christmas.  Quick ponder?

I have just taken and passed the Principles of taxation knowledge module on the ICAEW's ACA and my actor girlfriend asked me to help her with her self assessment and I came up against the following problem?

Despite being self employed her agent had deducted National Insurance Contributions.  This struck me as odd because the course taught us that self employed people pay class 2 and 4 but surely this can only be assessed at the end of the year with the SA right? meaning whatever was deducted from her had to be class 1 primary right?

So I tried to find an option to make a deduction from the liability via "tax deducted at source" but couldn't  and so I called HMRC and he said Income Tax (IT) and National insurance are unrelated, I asked that if PAYE includes both NI and IT and they can be deducted (as per the course) why can't NI in this case, he couldn't really answer me?

So I've come here for wisdom I guess I'm realising the gap between theory and practical and in my own learning?

1) Are NIC's and IT collected through PAYE? (I thought they were)

2) If not how are each collected for employed people?

3) Why might my girlfriend be paying NIC throughout the year even though she is self employed, would she have had to opt in or something?

Again any help would be great

KR

Adam

Replies (3)

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By tonyh
23rd Dec 2013 15:56

Actors are different

Actors are self employed for tax purposes and employed for nic. It is mad.

The gross income goes on to self employed page and expenses claimed as usual.

You need to check the nic ceiling.

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Euan's picture
By Euan MacLennan
23rd Dec 2013 17:03

Yes, but ...

... it will all change from April 2014 when actors will be treated as self-employed for NIC as well as for tax.

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By adamblack
26th Dec 2013 11:50

Thanks guys
 

Thanks guys

 

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