If you're self-employed and your annual profits are over a certain amount you normally have to pay Class 4 National Insurance contributions in addition to Class 2 contributions. This guide explains how much you pay and the circumstances when you may be exempt from paying. To find out about your wider tax and National Insurance responsibilities when you're self-employed, read the related guide 'Self-employed tax and National Insurance' - you'll find the link under 'Further information' at the end of the page.
On this page:
The amount of Class 4 National Insurance contributions you have to pay for any tax year is based on your profits for that year. You pay 9 per cent on annual profits between £7,755 and £41,450 (2013-14) and 2 per cent on any profit over that amount.
You work out your Class 4 National Insurance contributions on your
Self Assessment tax return and pay them alongside your Income Tax. Class
4 National Insurance contributions don't count towards benefit entitlements.
If you have more than one business, special rules apply for calculating
adjustments to profits on which you pay Class 4 National Insurance contributions.
If you file your return online, your Class 4 National Insurance contributions
will be worked out for you automatically. If you send in a paper tax
return by 31 October following the end of the tax year and leave the
space blank, HMRC will work out your contributions. You can work out
your Class 4 contributions yourself by using the Class 4 calculator
in the notes that come with your tax return supplement.
Tax returns if you're self-employed or in a partnership
Self Assessment Online - the benefits and how to register
Download guidance on working out your Class 4 contributions (PDF 82K)
You don't have to pay Class 4 National Insurance contributions if any of the following apply:
If you are under 16 you'll have to apply for an exemption by filling in form CA2835U. You can get the form by writing to:
HM Revenue & Customs
National Insurance Contributions & Employer Office
Deferment Services
Benton Park View
Newcastle upon Tyne
NE98 1ZZ
Go to HMRC6 'Residence, domicile and the remittance basis'
You don't have to pay Class 4 National Insurance contributions if you are still working and over State Pension age at the start of the tax year to which your Self Assessment tax return relates. If your birthday falls on 6 April itself you are still exempt from paying. For example, if you are completing a tax return for the tax year 6 April 2013 to 5 April 2014, you will not have to pay Class 4 National Insurance contributions for any of that year if you reach State Pension age on 6 April 2013 or any date before then.
If you reach State Pension age during the tax year, you will have to pay Class 4 National Insurance contributions for the whole of the year.
Find out more about stopping paying National Insurance contributions after State Pension age
Self-employed tax and National Insurance
Employed and self-employed tax and National Insurance
Class 2 National Insurance contributions
Claiming back overpaid National Insurance contributions
