I am employed as well, how do I limit the rate of Class 4 NICs charged to 1%?
Where Class1 NICs paid on employment income, plus Class 2 NICs paid at the weekly flat rate, plus the amount of Class 4 NICs chargeable at 8% would exceed the limiting amount, (£2,888 for 2008/09) then the Class 4 NIC liability may be reduced and the excess earnings charged at 1%. If this situation occurs, Class 4 NIC deferment should be requested from the National Insurance Contributions Office. Once deferment has been agreed, when completing the tax return you should tick the appropriate deferment box and TaxCalc will automatically calculate the Class 4 NICs at 1% of the taxable profit over the earnings threshold (£5,435 for 2008/09).
