A number of categories of people are exempt from paying Class 4 NICs, these are:

  1. People under the age of 16 at the beginning of the year of assessment are exempt from Class 4 NICs (Regulation 93 SS(C)R 2001).
  2. People over State pension age at the beginning of the year of assessment (Regulation 91(a) SS(C)R 2001).

What is a Class 2 NIC?

You make Class 2 National Insurance contributions if you’re self-employed to qualify for benefits like the State Pension. Most people pay the contributions as part of their Self Assessment tax bill.

What if I have gaps in my National Insurance?

You can have gaps in your National Insurance record and still get the full new State Pension. You can get a State Pension forecast which will tell you how much State Pension you may get. You can then apply for a National Insurance statement from HM Revenue and Customs ( HMRC ) to check if your record has gaps.

Should I pay Class 4 NIC voluntarily?

In general, the answer is “yes”. But if you pay the maximum amount of annual NIC by way of Class 1 and Class 2 contributions, you may not need to pay the full amount of Class 4 NIC. If this is the case then you will have to pay 2% Class 4 NIC on all profits above the level of £9,568 (2021/22 rate).

What does Class 4 NIC pay for?

The national insurance contributions you make help to pay for things like state benefits, statutory sick pay, maternity leave, and various other employment benefits.

What is the difference between Class 2 and Class 4 NIC?

The amount of Class 2 NIC due is based on the number of weeks of self-employment in the tax year. Class 4 NIC are based on the level of your self-employed profits. You are only liable to pay Class 4 NIC if your profits are over a certain level, the lower profits limit.

Why should I pay Class 2 NIC voluntarily?

Why you might want to pay voluntary contributions you’re close to State Pension age and do not have enough qualifying years to get the full State Pension. you know you will not be able to get the qualifying years you need to get the full State Pension during your working life.

How many years can you backdate National Insurance?

6 years
You can usually only pay for gaps in your National Insurance record from the past 6 years. You can sometimes pay for gaps from more than 6 years ago depending on your age.

Is it worth filling gaps in National Insurance?

Gaps can mean you won’t have enough years of National Insurance contributions to get the full State Pension. Royal London points out that these concessionary rates expire on 5th April 2019 after which, filling those same years could cost several hundred pounds more in total.