Glossary

Monday 28 May 2012

National Insurance

One of the reasons for registering as self employed is that you will need to start paying National Insurance in a different way from if you were employed.

As a self employed person you will pay the following National Insurance contributions:

Class 2 - This is a fixed weekly amount paid by monthly direct debit or a quarterly bill.
Class 4 - This is a percentage of your annual taxable profit from self-employment, which you start paying when your profits reach a certain limit.

Class 4 contributions are paid along with your income tax using the Self Assessment tax return.