Employment Allownce / NI

[arthursc0]

PAYE NI

This is a good point but it is worth noting that a director would only need to make a payment in the final quarter.

SO as I use Nixon Williams, and I enquired why I wasn't paying NI on the basic 833.33...only this morning, I am mildly surprised by Martins comments. Why? because I have just been told I do not need to pay anything in NI at all. So where does the last few months come into the equation as I am not in Month 11 of my financial year.

Colin.

[TheCyclingProgrammer]

SO as I use Nixon Williams, and I enquired why I wasn't paying NI on the basic 833.33...only this morning, I am mildly surprised by Martins comments. Why? because I have just been told I do not need to pay anything in NI at all. So where does the last few months come into the equation as I am not in Month 11 of my financial year.

Colin.

Martin is referring to the last quarter of the tax year. Director's NI is normally calculated on a cumulative basis and as such there is no liability until the final months of the tax year. There will be approx. £245 of employees NI that will be due on your final quarterly payment. This still works out tax efficient for most people because you save nearly double that in corporation tax from paying a £10k salary vs the threshold for NIC.

[TheCyclingProgrammer]

Indeed, that's how I have things set-up. I take Maslins' point, but I don't find it to be any hassle in practice.

Yes, you're doing monthly returns by RTI anyway, its just a single annual payment. It shouldn't be a big deal for anybody paying attention.

[Martin at NixonWilliams]

SO as I use Nixon Williams, and I enquired why I wasn't paying NI on the basic 833.33...only this morning, I am mildly surprised by Martins comments. Why? because I have just been told I do not need to pay anything in NI at all. So where does the last few months come into the equation as I am not in Month 11 of my financial year.

Colin.

Hi Colin,

I understand that the reason for your query was because you were concerned that with no NI being deducted, you may not earn a qualifying year. We explained that you will earn a qualifying year even if you are not currently paying any NI.

To clarify, based on your current salary level you will have an NI payment to make however this will not apply until the final quarter of the 2014/15 tax year. I will arrange for a follow up email to be sent to you explaining this in more detail.

I am sorry for any confusion caused.

Martin