[Rant] Tax Credits

[binky]

Wasn't the way it was explained to me by my first accountant, but it is the way I am set-up with my current accountant - 4th one in 10 years. I took to moving accountant every year / 2 years until I found one who talks complete sense and as a away of cross referencing info. Current accountant is very good, bit pricey, but pro-active

 

[Murdoch]

I'm wondering if the system is different over the border where Prodave is ?  If not he,s being ripped off  by HMRC. 

Or he could be under paying. Seems very odd to me.

 

[ProDave]

Here it is from the horses mouth https://www.gov.uk/self-employed-national-insurance-rates

If self employed you pay £2.75 per week class 2 national insurance, charged quarterly.

You also pay 9% class 4 national insurance on profit over £7596 calculated and charged annually after submitting your tax return.

Not sure why the NI threshold appears now to be different to the income tax threshold. So in theory you could be eligible for a small amount of class 4 NI but no income tax?

 

[Murdoch]

Here it is from the horses mouth https://www.gov.uk/self-employed-national-insurance-rates

If self employed you pay £2.75 per week class 2 national insurance, charged quarterly.

You also pay 9% class 4 national insurance on profit over £7596 calculated and charged annually after submitting your tax return.

Not sure why the NI threshold appears now to be different to the income tax threshold. So in theory you could be eligible for a small amount of class 4 NI but no income tax?

I remember now, you can opt to pay monthly or quarterly!

And yes the class 4 is "compulsory"

I did a bit of reading up on this last night and once you are of retirement age you can stop playing class 2 NIC's but if you are still working you still cop the 9% for class 4

Its about time NI was merged into tax and more loopholes were removed.

I do think the SE should be allocated a higher tax free threshold though!