National Insurance: the basics

National Insurance contributions for the self-employed

Self-employed people pay two types of National Insurance contributions (NICs) - Class 2 and Class 4.

Class 2 NICs

Most self-employed people pay Class 2 NICs.

These are set at a weekly rate of £2.40 in 2009-10 and they are paid to HM Revenue & Customs (HMRC) either monthly by direct debit or by quarterly bill.

You can apply for a certificate of exception if you have expected earnings of less than £5,075 in 2009-10.

Self-employed people do not have to pay Class 2 NICs if they are:

• under 16 years old
• over state pension age (60 for women, 65 for men)
• married women or widows entitled to pay reduced rate Class 1 NICs

See our guide on Class 2 National Insurance contributions.

Class 4 NICs

Class 4 NICs are paid in addition to Class 2 NICs by self-employed people who make a profit over a certain limit in the tax year - this limit is set at £5,715 in 2009-10. Self-employed people declare their profits annually on a self-assessment tax return. The self-assessment supplement contains a Class 4 calculator. See our guide on Class 4 National Insurance contributions.

Use our interactive tool to identify the National Insurance contributions you must pay.

HMRC's Business Payment Support Service (BPSS)

A new business support service has been launched by HMRC to help businesses struggling to meet tax, National Insurance or other tax payments.

If you are concerned that you may not be able to pay amounts that are owed or will soon be owed to HMRC, you can contact the new HMRC BPSS. HMRC staff will review your situation and discuss temporary payment arrangements tailored to your business' circumstances. You can contact the HMRC Business Payment Support Service Helpline on Tel 0845 302 1435.

Find out how the HMRC BPSS can help businesses.

Subjects covered in this guide

• Introduction
• National Insurance contribution types
• National Insurance contributions for employers and employees
• National Insurance contributions for the self-employed
• I'm both an employer and an employee

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