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HMRC internal manual

National Insurance Manual

Class 4 NICs: Structure from 6 April 2003: Calculation of Class 4 NICs for tax years from 6 April 2003 onwards

 

From 6 April 2003, Class 4 NICs are payable on all profits above the relevant year’s Lower Profits Limit (LPL):

The amount of Class 4 NICs due is the aggregate of the:

  • main Class 4 NICs percentage on so much of the profits as exceeds the LPL but does not exceed the Upper Profits Limit (UPL) and
  • additional Class 4 NICs percentage on all profits above the UPL.

There is no limit on the amount of additional Class 4 NICs payable. The amount of this uncapped liability is determined only by the amount of profits in excess of the UPL. The greater the profits, the greater the amount of Class 4 NICs that will be due but see [ 

From 6 April 2003, Class 4 NICs are payable on all profits above the relevant year’s Lower Profits Limit (LPL):

The amount of Class 4 NICs due is the aggregate of the:

  • main Class 4 NICs percentage on so much of the profits as exceeds the LPL but does not exceed the Upper Profits Limit (UPL) and
  • additional Class 4 NICs percentage on all profits above the UPL.

There is no limit on the amount of additional Class 4 NICs payable. The amount of this uncapped liability is determined only by the amount of profits in excess of the UPL. The greater the profits, the greater the amount of Class 4 NICs that will be due but see](https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim24150) where a contributor is both employed and self-employedand subject to an annual maximum of contribution liability

The Class 4 NICs rates and limits for all tax years from 2003/2004 are provided at NIM24050

Examples of the Class 4 NICs calculations from 6 April 2003 are given at NIM24051