I've worked three months casual this year earning more than the lower earnings limit per week but less than £6475 in the year. Do I still pay 11% N.I.C. I ask because I got this from direct.gov
"If you work part-time or on a casual or temporary basis you must pay Income Tax and National Insurance contributions if you earn more than £6,475 per annum. This applies whether you are employed or self-employed."
Tks Nick
The directgov quote is very simplified - and not true in all cases.
Assuming your "casual work" payments were correctly processed through PAYE, you have no [ more ] NI to pay. If some was deducted at the time (cos earnings in any one "pay period" exceeded ET (earnings threshold), you can't get any of it back (unless you're a company director or are over retirement age).
HTH
It seems the direct.gov site is written by idiots who assume everyone is as simple as them!
For a start the 6475 figure only applies to income tax, not NI. The income tax and NI primary thresholds used to be aligned, until the 10p tax rate farce forced the government to increase the tax threshold to mitigate the losses to people on low incomes. But they didn't increase the NI primary threshold, which is 110 a week, ie 5720 a year.
Secondly NI works on a pay period basis, unlike PAYE which works on an annual basis. If you get paid weekly then you'll pay NI if your income exceeds 110 a week, or 476 per month if you get paid monthly. Unlike tax, you can't reclaim any of this NI if you stop work part way through the tax year.
To make matters worse, you'll probably find that the NI you paid gets you bugger all in credits, if your income for the whole tax year was less than 4940, unless you got credits for other reasons such as signing on. You pay on a pay period basis but credits work on an annual basis. Go figure as the Americans say.
Also you can get credits without actually paying any NI, as the threshold for getting credits is lower than the threshold for paying NI. Which means someone who earns 5500 spread evenly over the tax year will get NI credits for that year but will not pay anything in NI, whereas someone earning 4500 over 3 months will end up paying about 338 in NI and get no NI credits!!
But it's obviously a fair and equitable policy to put NI rates up to pay for this government's debts.
"Andy Pandy" wrote
Actually, it's 5715 per year (if year basis applies).
"Andy Pandy" wrote
Not always!
"Andy Pandy" wrote
Not necessarily, eg if the income is spread over two (or more) different employments.
"Andy Pandy" wrote
... unless you're a director and had opted for month basis...
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