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Posted 3 months ago by ColinC Collier
Hi My question revolves around income tax and NI across both employed PAYE roles and self employed. I left employment in October as a higher rate tax payer. So income tax and NI have been deducted at the prevailing rates. I am now starting self employment. The NI 6% rates for self employment are lower than employee 8% rates whilst employed. I have seen conflicting advice regarding the treatment of the 0% NI band. Question:- If I have already reached the 2% NI band as an employee – i.e. been paid >£50k, is this taken into account when paying Class 4 NI? Or are the two income streams treated in complete isolation? Ie even though I have used a 0% band whilst employed, will the self employment receive a £12,570 0% band, then 6% to £50,270, then 2% thereafter? Or is there no separate 0% band if already used in employment/PAYE? And/or are the two separate streams of income aggregated to determine the total NI? Thank you for your help
Posted 2 months ago by HMRC Admin 20 Response
Hi,
When your tax return is completed your tax and liability for Classes 1, 2 and 4 NICs will be looked at as a whole and any Class 1 NICs that have been paid will be taken into account when calculating the Class 2 and 4 due.  
However this will only happen if you have registered to pay Class 2 NICs and this is noted on your NI record.  
If you have not done so already, you should register to pay Class 2 NICs as a self employed individual 
Pay voluntary Class 2 National Insurance contributions if you do not pay through Self Assessment
Thank you.

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