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
Replies (4)
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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.
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.
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….
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.