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second Job and NI contributions

Last post Sat, Dec 12 2009, 10:32 AM by fizzylizzy. 13 replies.
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  •  Sat, Dec 12 2009, 10:32 AM

    Re: second Job and NI contributions

    I too was referring to the other responses not yours!
    Thanks.
    • Post Points: 5
  •  Fri, Dec 11 2009, 5:34 PM

    Re: second Job and NI contributions

    Hello there.

    I hope you did not think I was saying you were incorrect. I was referring to other attempts to answer the question and I did not see your response, in fact, had a seen it, it would have saved me a job :). You are absolutely correct on both accounts. I know it's a complex area and I just wanted to make sure the gentleman obtained the right information, especially now that the new penalty regime has come into force and which could apply to any late paid class 2 contributions.

    • Post Points: 20
  •  Thu, Dec 10 2009, 11:22 PM

    Re: second Job and NI contributions

    I am afraid I am correct. Both employers must operate NIC if applicable but the ET applies to each job independently. The Revenue guidance is it not completely clear but what they mean is that if either (or both) jobs exceed the ET that job must deduct NIC with reference to that job's earnings only. So you could have NIC deducted from either or both jobs (or neither) depending on your earnings.

    Generally, the only time earnings are added together for NIC purposes is if you are a director of connected companies .

    I can assure you this is the correct treatment. Please feel free to contact HMRC to confirm.

    However, as others have said a childminder is very likely to be self-employed. In this case class 1 NIC are not due at all anyway. A self-employed person pays a weekly class 2 NIC (fixed - currently £2.40 per week) and then 8% class 4 NIC on any profits over £5,720. Class 4 NIC is paid through self-assessment along with any tax due on the profits. If you expect the profit to be below £5,075 you can apply for an exception to class 2 NIC and pay no NIC at all on your self employment.

    • Post Points: 20
  •  Thu, Dec 10 2009, 8:36 PM

    Re: second Job and NI contributions

    I can give you the correct answer to this but would need to know whether your wife is self-employed as a childminder (most are) or an employee. If she is employed is she paid weekly or monthly.? When did she commence childminding?

    • Post Points: 5
  •  Thu, Dec 10 2009, 7:57 PM

    Re: second Job and NI contributions

    many thanks for all the contributions.most appreciated.
    • Post Points: 5
  •  Thu, Dec 10 2009, 10:53 AM

    Re: second Job and NI contributions

    Look at this link:

    www.hmrc.gov.uk/faqs/nicqc1.htm#4

    Getting away with paying NI on a second job and whether you should legally pay it are two differnt things, when you earn under the NI allowance, you are supposed to declare to you employer that you have another job and fill out a form for the inland revenue. You could get away with it because your employer doesnt have to give your NI details to the inland revenue if you earn under the lowest tax allowance, so you can get away with it, but you should be paying it.

    I suggest you take it up with your employers in case you recieve an NI bill if they are investigated, especially if they are accountants!

    Its all there in the link...

    • Post Points: 20
  •  Thu, Dec 10 2009, 10:02 AM

    Re: second Job and NI contributions

    You do in effect get two NI allowances if you've got two jobs - there is no way each employer can know how much you are paid in the other job so they can only do the computations based on what you earn with them. So in my case I've got two jobs - one which is over the NI limit (where I pay NI) and one which is just below (where I don't pay NI). As the second job is with a firm of accountants I'm sure they are deducting the right amount.

    Tax is different as it is easy to let the second employer know that you're using your allowance elsewhere by going on a BR tax code.

    To answer the original poster - yes she will have to pay NI but if she is self employed (which most childminders are) then she will only have to pay self employed stamp and then a percentage of her profits along with her tax payment.

    • Post Points: 20
  •  Thu, Dec 10 2009, 9:22 AM

    Re: second Job and NI contributions

    The most recent post stating that if you have two jobs you have double the NI allowance is not correct, it works in exactly the same way as tax where if the gross amount of your earnings in both jobs go above the limit you have to pay on anything you earn on top of that, this is what the govenment website says:

    If you have more than one job with different employers, each employer has to deduct National Insurance Contributions if your gross pay with both or either of them is above the ET.

    Annoying but then I guess a lot of people would choose to work two jobs if this were not the case and it would be open to abuse.

    Best regards

    Katy

    • Post Points: 65
  •  Wed, Dec 09 2009, 11:34 PM

    Re: second Job and NI contributions

    This is not quite correct.

    If you have two jobs with unconnected employers you will receive the 'nil rate band' for NIC purposes for each of the two jobs (the first £110 per week from each employment is free of NIC).

    In the example you give 2 jobs would mean £5,720 per annum x 2 = £11,440 free of NIC whereas with one job only one NIC band of £5,720 per annum is available. A saving of £629.20 in employee's NIC over a year.

    if you want to be silly get 5 different jobs (one for each working day of the week) each paying £5,720 per year and you pay no NIC at all!

    • Post Points: 5
  •  Wed, Dec 09 2009, 9:20 PM

    Re: second Job and NI contributions

    As previous reply. Yes you do have to pay NI on both jobs.

    There is one perk though. If your wife is earning above the limit for SMP at both jobs, your wife can get SMP at both jobs.

    • Post Points: 5
  •  Wed, Dec 09 2009, 7:48 PM

    Re: second Job and NI contributions

    Taking a 2nd job is the same as having one job but earning more. If she had one job earning £30k a year or two jobs earning £20k+£10k, she would still pay the same NI contributions as well as also having to pay income tax on that as well.

    The pension side of it can have its fair and unfair sides. If you work hard and get paid lots, you still get paid the same pension as someone who had been on benefit their whole life. The only thing you can do to solve that is to get a personal pension.

    Such as life is that it penalises the people who work had to subsidise the lazy people who don't work through choice not because of circumstance.

    • Post Points: 20
  •  Wed, Dec 09 2009, 7:27 PM

    Re: second Job and NI contributions

    My wife worked as a partner in our shop, paying NI on her wages. When she took an evening job as well she paid two lots of NI for over 5 years. What upsets her is that she got no extra pension entitlement or any other benefit from this dual payment.

    So, sorry, but the answer is yes - you pay NI for each & every job.

    • Post Points: 20
  •  Mon, Nov 30 2009, 10:09 AM

    Re: second Job and NI contributions

    Try this link:

    http://www.hmrc.gov.uk/faqs/nicqse.htm

    It's the Revenue Collection government page with frequently asked questions.
    • Post Points: 5
  •  Mon, Nov 30 2009, 9:40 AM

    second Job and NI contributions

    hope someone can give me some advice.my wife works full time with the royal and pays NI. she has started working as a child minder (about 5 months now).

    the inland revenue has asked her to pay NI on her child minding job as well.she called the inland revenue to explain that she pays NI at the royal mail(her main job). the person on the phone however said she still has to pay NI on her second job as a child minder.

    my question is this- does she really have to pay NI contributions on a second job? i understand she has to pay tax on the second job but does she have to pay NI again?

    i hope someone with some understanding of tax can explain this to me. many thanks.

    • Post Points: 80