NI if Self Employed AND Director?

Discussion in 'Accounts & Finance' started by Alice M, Feb 8, 2018.

  1. Alice M

    Alice M UKBF Newcomer Free Member

    9 0
    Hi folks,

    Can I just sanity check something? I've had a quick look on HMRC and can't find any confirmation of this. I'm a director of my own ltd. co AND I'm self employed (separate smaller business). Does that mean I get £8,164 NI allowance as a director AND £8,164 allowance for Class 4 NI (so effectively a total allowance of £16,328??).

    TIA,

    Alice
     
    Posted: Feb 8, 2018 By: Alice M Member since: Jan 7, 2018
    #1
  2. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,551 861
    No.

    The reference to £8164 is for class 4 national insurance.
    Directors do not pay class 4 national insurance so it is irrelevant.
     
    Posted: Feb 8, 2018 By: STDFR33 Member since: Aug 7, 2016
    #2
  3. SteLacca

    SteLacca UKBF Ace Free Member

    1,038 196
    I understand why STDFR33 has replied in that manner, but I think you are operating under a misapprehension and, to some extent, trying to combine apples and pears.

    Class 4 NI is not National Insurance at all other than in name. It is, in a practical sense, a tax on being self-employed. It doesn't contribute to any benefits/pension etc. Class 1 NI (that you pay as a director/employee) is National Insurance. The only crossover between the directorship and self-employment is with regards to Class 2 NI (The self-employed stamp), which does, indeed, have the same limits, entirely independently of Class 1, and so you could have a double limit, but since Class 2 is only £145 per annum, the saving is not significant.
     
    Posted: Feb 8, 2018 By: SteLacca Member since: Jun 16, 2016
    #3
  4. Alice M

    Alice M UKBF Newcomer Free Member

    9 0
    So just a few scenarios to get this right in my head...
    • If I earn £5000 (profit) self employed and £8000 (wage) as a director I would pay no NI.
    • If I earn £8000 (profit) self employed and £8000 (wage) as a director I would pay £145 Class 2.
    • If I earn £10000 (profit) self employed and £8000 (wage) as a director I would pay £145 Class 2 AND Class 4
    • If I earn £10000 (profit) self employed and £10000 (wage) as a director I would pay £145 Class 2, Class 4 AND Class 1
    Is that right? :)
     
    Posted: Feb 8, 2018 By: Alice M Member since: Jan 7, 2018
    #4
  5. SteLacca

    SteLacca UKBF Ace Free Member

    1,038 196
    That looks about right.
     
    Posted: Feb 9, 2018 By: SteLacca Member since: Jun 16, 2016
    #5