Class 4 NICs: Structure: Annual Class 4 NICs maximum pre 6 April 2003: Contributors who are employed and self-employed: Calculation method
Regulation 100 (SSCR 2001)
NIM24102 explains that there is no prescribed annual maximum of Class 2 and 4 NICs for a person who is self-employed only. NIM24120 explains that contributors who are both employed and self-employed are restricted to a prescribed annual maximum of Class 4 NICs liability
To calculate the annual maximum of Class 1, 2 and 4 NICs payable by someone who has been both employed and self-employed in the same tax year the following method can be used.
Multiplying the profits between the Lower Profits Limit and the Upper Profits Limit by the relevant Class 4 NICs main percentage.
Add to the figure at step 1, 53 x the Class 2 rate for the tax year
Deduct from step 2 the amount of Class 1 and 2 NICs paid by the contributor for the year
If the result of step 3 is a negative figure, no Class 4 NICs are due
If the result of step 3 is a positive figure, that is the maximum amount of Class 4 NICs due
Examples of the calculation can be found at NIM24130.