NIC on cash earnings ― overview

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

UK National Insurance applies to a variety of different sorts of income. The history and introduction of NIC system is covered in Simon’s Taxes E8.101. NIC is split into different classes depending on the type of income. See the Overview of NIC Classes, rates and thresholds for more on the different classes and rates.

This guidance note concentrates on NIC relating to employment income in the UK. As with tax, it is important to understand whether an individual is an employee or self-employed for NIC purposes. See the Categorisation of earners for NIC purposes guidance note and Simon’s Taxes E8.201.

For NIC and self-employment, see the Class 4 national insurance contributions guidance note. For international aspects of NIC, see the Global mobility ― overview guidance note.

NIC for employees

Class 1 NIC is payable on an employee’s earnings. Earnings are defined as ‘any remuneration or profit derived from an employment’. See Simon’s Taxes E8.232 for more on the interpretation of what is earnings for NIC.

Class 1 NIC has two parts:

•
primary Class 1 NIC.

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Personal Tax

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more

Employment Tax

Loans provided to employees

Loans provided to employeesEmployers sometimes provide their employees with loans, sometimes charging interest and often not, either as part of the reward package or to help the individual meet significant expenditure. For example, it is common to provide loans for the purchase of annual travel

14 Jul 2020 12:11 | Produced by Tolley Read more

Owner-Managed Businesses

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more

��Ӱ��