Class 4 NICs: Structure pre 6 April 2003: Calculation of Class 4 NICs for tax years 1975/1976 to 2002/2003
Section 15(3), SSCBA 1992
For all tax years up to and including the 2002/2003 tax years, Class 4 NICs werepayable on profits or gains chargeable to income tax under Cases I or II of Schedule D ofthe Income and Corporation Taxes Act 1998 (ICTA 1988).
If a self-employed persons earnings were not taxable under Case I or II of ScheduleD of ICTA 1988 there was no liability for Class 4 NICs, except for certain people who wereliable to pay special Class 4 NICs, see NIM24200.
The amount of Class 4 NICs due was calculated at a set percentage of the profits or gainsfor a particular year between the:
- Lower Profits Limit (LPL) and
- Upper Profits Limits (UPL)
Profits and gains were always expressed in whole pounds with fractions beingdisregarded.
No Class 4 NICs were payable on any profits or gains below the LPL orabove the UPL but see NIM24030 for guidance on changes to Class4 NICs liability for all years after 2002/2003.
The LPL and UPL were, and continue to be, prescribed in legislation and are reviewed eachyear by the Treasury.
The Class 4 NICs rates and LPL and UPL limits for all tax years from 1975/1976 to2002/2003 are provided at NIM24010.
Examples of Class 4 NICs liability calculations applying to all tax years up to andincluding the 2002/2003 tax year are provided at NIM24020