Hello,
Can anyone help me with this, I can't find a straight answer anywhere.
When calculating trading profits, after deducting all of the allowable expenses, is National Insurance class 2 calculated from this figure or is loss relief taken off first. I have a loss brought forward from the previous year. I know the loss relief is taken off trading profits before calculating class 4 national insurance but from the little info I have found it's made me unsure if it’s the same for Class 2
Thanks
Replies (5)
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For class2NI loss relief is also available and can be claimed independently of the allocation of losses for tax purposes (they may be used in sideways menner) - the relevant guidance is all there explaining how it wokrs and waht to do on tax return in the helpsheets and self assesment notes if you go looking hard enough - i would probably start with losses helpsheet.
Class 2 Is fixed rate
It is the one that clients choose to pay to get a state pension credit
Never bothered to concern myself as the software does it all.
What does your software say?
Exactly the reason why I advise clients to think very carefully before choosing not to pay their class 2 contributions voluntarily, unless they already have enough qualifying years for a full state pension.
Agree. The big question is whether the client wants to pay.
If not - and there can be valid reasons - imho, the relevant profits are after deduction of losses.