What are National Insurance Contributions (NICs)?

National Insurance Contributions (NICs) are a form of tax paid by employees and employers and self-employed in the UK. NICs fund various benefits and services, including the National Health Service (NHS), state pension, maternity allowance and unemployment benefits.

If you are employed, you will typically pay National Insurance contributions through the PAYE (Pay As You Earn) system, which automatically deducts a percentage from your monthly earnings. The amount you pay is based on your earnings, and there are different rates for employees and employers.

If you are self-employed, your NICs will be calculated based on your self-assessment tax return. You will have to pay them at the same time as Income Tax.

How much do I have to pay?

How much you pay depends on which one out of four types of National Insurance Contributions applies to your circumstances. For example:

• Class 1 NIC is paid by the employees and employers
• Class 2 NIC is paid by self-employed individuals
• Class 3 NIC is a voluntary contribution
• Class 4 NIC is paid by self-employed individuals whose profits exceed a certain amount

How can I check my National Insurance Contributions?

HMRC offers an online service to check your National Insurance Contributions (NIC) records. In order to use the service, you will need to have a Government Gateway account. If you don't have an account, you can apply to set one up online.

Signing in to the 'Check your National Insurance record' service will also activate your personal tax account if you haven't already done so. HMRC's personal tax account can be used to complete various tasks in real-time such as claiming a tax refund, updating your address and completing your self-assessment return.

What records can I see once I sign in to "Check your National Insurance Records"?

Your National Insurance record online will let you see:

• What you have paid up to the start of the current tax year (6 April 2022)
• Any National Insurance credits you've received
• If gaps in contributions or credits mean some years don't count towards your State Pension (they aren't "qualifying years")
• If you can pay voluntary contributions to fill any gaps and how much will this cost

In some circumstances, it may be beneficial, after reviewing your records, to make voluntary NIC contributions to fill gaps in your contributions record to increase your entitlement to benefits, including the State or New State Pension.

If you would like more advice and assistance with your National Insurance Contributions, please contact us at info@gkaccountingservices.com

or call us on 01269 508 081, where we will be more than happy to answer any of your questions.