NIM24101 - Class 4 NICs: Structure: Annual Class 4 NICs maximum pre 6 April 2003: Purpose of an annual maximum
Section 6 Social Security Contributions and Benefits Act 1992 (SSCBA)
Regulation 100 Social Security (contributions) Regulations 2001 (SI 2001 No.1004)
Guidance on the Class 4 NICs annual maximum for all tax years from 2003/2004 is provided at NIM24150 onwards.
»Ê¹ÚÌåÓýapp following guidance relates solely to tax years from 1975/1976 to 2002/2003.
NIM11001 (Class 1) NIM20001 (Class2) and NIM24030 (Class 4) provide guidance on the calculation methods used to determine a contributor’s liability for National Insurance contributions.
Primary legislation, at section 6(5) SSCBA 92, imposes a full contribution liability in respect of each employment held by a contributor. This means that without some form of limiting factor, a contributor who has more than one employed earner’s employment, or who is both employed and self-employed, would face a NICs liability on all of their earnings above the appropriate thresholds in each of their employments.
In other words, a contributor who is both employed and self-employed would be liable to pay Class 1 NICs in each employed earner’s employment held and Class 2 and 4 NICs as a self- employed person.
»Ê¹ÚÌåÓýapp annual maximum is the device that serves to limit the amount of National Insurance contributions payable by any contributor who holds more than one employment. »Ê¹ÚÌåÓýapp annual maximum does not apply to a contributor who is wholly self-employed or who holds only one employed earner’s employment.
Guidance on the pre 6 April 2003 maximum amount of NICs payable is provided as follows: