What is National Insurance?

what is class 3 national insurance

This film is part of the series "National Insurance"

What is National Insurance?

National Insurance is a separate kind of tax which applies to earnings. For employees, they would pay National Insurance on their earnings. The employer will also pay the National Insurance on earnings it pays to the employees. For the self-employed they would pay two types of National Insurance, something called Class 2 National Insurance at a low weekly rate and then Class 4 National Insurance, the amount which depends on the profits they earn each year.

What types of National Insurance are there?

There are four types of National Insurance. Class 1 applies to employment earnings, and is paid both by the employer and by the employee on salaries and wages and all forms of enumeration. Class 2 is paid by the self-employed at a low weekly rate. Class 3 is a voluntary contribution for people who want to make up a complete national insurance record to entitle them to certain state benefits. Class 4 is

levied on the self-employed; the amount payable depends how much profit they earn each year.

Why do I have to pay National Insurance?

The National Insurance pool is used to fund certain types of government expenditure. However, many people regard it as a separate income tax. Some people even say that the British tax system would look more honest if income tax and National Insurance were amalgamated. The trouble is that would make it look as though the UK had a top rate of income tax of over 50 percent. That's quite unacceptable to politicians.

What can I do if I'm not paying enough National Insurance?

The important thing that strikes most people is to make sure that they have a sufficient National Insurance contribution record, to entitle them to certain state benefits like the old age pension. It's possible to contact the social security office and ask them to send you a statement showing your National Insurance record, and indicating whether it's adequate to provide key state benefits.

Source: www.videojug.com

Category: Insurance

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