The short version: Class 4 National Insurance is what self employed people pay on their profits. If you earn above the threshold from self employment, you’ll pay Class 4 through your Self Assessment tax return.
How much is it?
There’s a lower profits limit below which you pay nothing. Above that, you pay a percentage of your profits. The rate drops once you hit the upper profits limit. Check gov.uk for the current thresholds and rates.
What about Class 2?
Class 2 has been scrapped as a compulsory payment. You can still pay it voluntarily if your profits are low and you want to protect your State Pension, but you don’t have to.
What if I’m employed and self employed?
You’ll pay Class 1 on your employment earnings and Class 4 on your self employment profits. Both apply if you’re earning enough from each source.
Want to know exactly what you’ll owe? Let’s have a chat about your situation.
