Accountants, Tax Advisers And Business Consultants

NATIONAL INSURANCE

National insurance contributions (NIC) are essentially a tax on earned income. The national insurance (NI) regime divides income into different classes:-

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Class 1 contributions are payable on earnings from employment, while

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Class 2 and 4 contributions are paid by the self-employed /partners, and

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Class 3 contributions are paid on a voluntary basis

National insurance is often overlooked yet it is the largest source of Government revenue after income tax. From April 1999 the collection of NIC has been taken over by the Revenue to promote greater alignment of tax and NIC’s.

The Revenue is expected to make over 100,000 compliance visits each year in an attempt to identify and collect arrears of NIC. They may ask to see the records supporting any payments made. The Revenue has the power to collect any additional NIC that may be due for both current and prior years. Any arrears may be subject to interest and penalties. The Revenue have wide enforcement powers and anti-avoidance legislation available to them. Consequently it is important to ensure that professional advice is sought so that all compliance matters are properly dealt with.

Please contact us for advice on NIC compliance and ways to minimise its effects,
whether you are an employer or employee, employed or self-employed. Awareness of NIC matters is vital.

One topical issue at the moment is the transferring of a sole-trader business or a partnership into a company to possibly save national insurance. Professional advice and help however must first be sought.

We would be delighted to advise you on the above and any compliance matters relevant to your own circumstances.

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