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Class 4 National Insurance Contributions
Self-employed individuals are usually required to pay Class 4 National Insurance contributions (NICs) if their annual profits exceed £12,570. For the 2024-25 tax year, Class 4 NIC rates are set at 6% (down from 9% in 2023-24) on profits between £12,570 and £50,270, with an additional 2% charged on profits above £50,270.
Certain groups are exempt from paying Class 4 NICs, including:
- Individuals under 16 at the start of the tax year.
- Individuals over State Pension age at the start of the tax year. If someone reaches State Pension age during the tax year, they remain liable for Class 4 NICs for the entire tax year.
- Trustees and guardians of incapacitated individuals are exempt from paying Class 4 NICs on that income.
The Class 4 NIC rate is lower than the corresponding rate for employees, who pay 8% on the same income levels. Both employees and the self-employed contribute 2% on income above the higher rate threshold.
The majority of individuals pay Class 4 National Insurance via self-assessment.
Source: HM Revenue & Customs | 14-10-2024
Class 4 National Insurance Support from Specialist Tax Accountants
Understanding Class 4 National Insurance Contributions is an important part of managing your tax position if you are self-employed, particularly with rate changes and exemptions applying in different circumstances. Working with experienced tax accountants in London can help ensure Class 4 NICs are calculated correctly and reported accurately through Self-Assessment. At CIGMA Accounting, we provide specialist tax support for Retailers, Construction Companies, Recruitment Companies, and Healthcare Professionals, helping clients understand their National Insurance liabilities and plan their tax payments efficiently.
Local London Accountants for National Insurance and Tax Planning
Our local accountants in London support clients through our offices in Farringdon and Fulham Broadway, as well as nearby areas including Angel, Hatton Garden, Walham Green, and Sands End. Clients are welcome to visit our offices across London to discuss National Insurance contributions, Self-Assessment calculations, and wider personal tax planning.
Class 4 National Insurance – HMRC Guidance and Expert Help
For official guidance on Class 4 National Insurance Contributions, thresholds, and rates, you can refer to HMRC’s guidance on GOV.UK.
If you are looking for reliable accountants near you to help with National Insurance and Self-Assessment compliance, our team can provide clear, practical advice tailored to your circumstances.
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