What is Class 4 National Insurance ?

This is our Class 4 National Insurance Guide

If you are Self-Employed you normally have to pay Class 4 National Insurance Contributions if your profits are over a certain amount.

We will help you with your Class 4 NI as part of the Self Assessment process.

Limited Companies do not pay Class 4 NI.

Please visit our webpage to help you decide whether to trade as a Sole Trader or Limited Company.

Class 4 NI Rates – How much is payable ?

The amount of Class 4 NI contributions you have to pay for any tax year is based on your profits for that year.

For the tax year 2020/21 (6/4/20 to 5/4/21):
• 9% on business profit between £9,500 and £50,000
• 2% on business profit over £50,000.

For the tax year 2021/22 (6/4/21 to 5/4/22):
• 9% on business profit between £9,568 and £50,270
• 2% on business profit over £50,270.

This is in addition to Income Tax and Class 2 NI, and any Student Loan repayments.

How is Class 4 NI Paid ?

Class 4 NI contributions are calculated as part of Self Assessment tax return and are paid at the same time as Income Tax.

Class 4 NI can also be deferred (reduced) if you are also in employment.

Class 4 NI Deferment

If you have a full time job as well as being Self Employed, it is possible that Class 4 NI contributions can be deferred. In these circumstances it is possible that you may only need to pay 2% instead of the 9% in the bands above.

Payments On Account

Class 4 NI is also used for the Payments On Account calculation.

Government and HMRC Webpages

HMRC: Class 4 National Insurance contributions

Gov.UK: National Insurance Overview

Gov.UK: Self-employed National Insurance rates

HMRC: Self-employed tax and National Insurance