NIM24040 - Class 4 NICs: structure from 6 April 2003: married women and widows with reduced rate elections

Section 15 SSCBA 1992

National Insurance Contributions Act 2002

Chapter 2 of Part 2 of ITTOIA 2005

NIM30000 provides detailed guidance on the National Insurance contribution liability of those married women and widows who hold valid reduced rate elections. Those women are not excepted from liability to pay Class 4 NICs as explained at NIM30003. 

A self-employed married woman or widow who held a reduced rate election and who was chargeable to Income Tax on profits under Chapter 2 of Part 2 of ITTOIA 2005 (formerly Case I or II of Schedule D of ICTA 1988) is liable for Class 4 NICs in the same manner as any other self-employed person.  This includes all tax years prior to 2003/2004.

NIM24033 explains the changes to the structure of Class 4 NICs from 6 April 2003 provided by amendments to section 15 SSCBA 1992 and introduced as part of National Insurance Contributions Act 2002 (NICA 2002).

NICA 2002 made no changes to the rules covering the payment of Class 4 NICs by those married women and widows who are self-employed and who have a valid reduced rate election.

This means that from 6 April 2003 those married women and widows with a valid reduced rate election will pay Class 4 NICs:

  • at the main Class 4 NICs percentage on so much of their profits or gains for a tax year as:
  • exceeds the Lower Profits Limit (LPL) but
  • does not exceed the Upper Profits Limit (UPL) and
  • the additional Class 4 NICs percentage on so much of their profits or gains as exceeds the UPL.

For the tax year from 6 April 2003 to 5 April 2011:

  • the main Class 4 NICs percentage is 8% and
  • the additional Class 4 NICs percentage was 1%

For the tax years from 6 April 2011 onwards:

  • the main Class 4 NICs percentage is 9% (1025% for the 2022 to 2023 tax year) and
  • the additional Class 4 NICs percentage is 2% (3.25% for the 2022 to 2023 tax year)

For the tax years from 6 April 2024 onwards:

  • the main Class 4 NICs percentage is 8%, and
  • the additional Class 4 NICs percentage is 2%