Tag: tax

National Insurance Rate Changes from 6th January 2024

The amount of National Insurance you pay depends on your employment status and how much you earn.

If you’re employed

You pay Class 1 National Insurance contributions.

The Class 1 National Insurance rates for most people for the 2023 to 2024 tax year are:

Your payFrom 6 April 2023 to 5 January 2024From 6 January 2024 to 5 April 2024
£242 to £967 a week (£1,048 to £4,189 a month)12%10%
Over £967 a week (£4,189 a month)2%2%

You’ll pay less if:

Employers pay a different rate of National Insurance depending on their employees’ category letters.

How to pay

You pay National Insurance with your tax. Your employer will take it from your wages before you get paid. Your payslip will show your contributions.

If you’re a director of a limited company, you may also be your own employee and pay Class 1 National Insurance through your PAYE payroll.

If you’re self-employed

You pay Class 2 and Class 4 National Insurance, depending on your profits. Most people pay both through Self Assessment.

If your profits are between £6,725 and £12,570 a year, your contributions are treated as having been paid to protect your National Insurance record.

You may be able to pay voluntary contributions to avoid gaps in your National Insurance record if you:

  • have profits of less than £6,725 a year from your self-employment
  • have a specific job (such as an examiner or business owner in property or land) and you do not pay Class 2 National Insurance through Self Assessment

If you have gaps and do not pay voluntary contributions, this may affect the benefits you can get, such as the State Pension.

If you have a specific job and you do not pay Class 2 National Insurance through Self Assessment, you need to contact HM Revenue and Customs (HMRC) to arrange a voluntary payment.

If you’re employed and self-employed

You might be an employee but also do self-employed work. In this case your employer will deduct your Class 1 National Insurance from your wages, and you may have to pay Class 2 and 4 National Insurance for your self-employed work.

How much you pay depends on your combined wages and your self-employed work. HMRC will let you know how much National Insurance is due after you’ve filed your Self Assessment tax return.

Directors, landlords and share fishermen

There are different National Insurance rules if you’re a:

You can apply to HMRC to check your National Insurance record and claim a refund if you think you’ve overpaid.

VAT Relief For Charities

VAT taxCharities pay VAT on all standard-rated goods and services they buy from VAT-registered businesses.  As a charity you do not pay VAT when you buy some goods and services

What qualifies for the reduced rate

Your charity pays 5% VAT on fuel and power if they’re for:

  • residential accommodation (for example, a children’s home or care home for the elderly)
  • charitable non-business activities (for example, free daycare for disabled people)
  • small-scale use (up to 1,000 kilowatt hours of electricity a month or a delivery of 2,300 litres of gas oil)

If less than 60% of the fuel and power is for something that qualifies, you’ll pay the reduced rate of VAT on the qualifying part and the standard rate (currently 20%) on the rest.

Qualifying fuel and power includes gases, electricity, oils and solid fuels (such as coal). It does not include vehicle fuel.

What qualifies for the zero rate

Find out about the conditions you must meet so that your charity pays no VAT (the zero rate) when you buy:

VAT-free goods from outside the UK

Charities do not pay VAT on goods imported from outside the UK as long as they’re benefiting people in need by providing:

  • basic necessities
  • equipment and office materials to help run your organisation for the benefit of people in need
  • goods to be used or sold at charity events

You can check which goods you can claim VAT relief for as well as how to claim.