Class 4 NI is a further payment levied on self employed taxpayers. It is paid in addition to the self employment tax paid in January, annually. The contributions paid DO NOT increase any benefits or state pension. The taxpayer has a 9% extra cost to pay!Profits made create a taxable figure. The levels are- from £7956 to £41865. Any amount of profit exceeding £41865 attract 2% with no maximum.
Solution? To avoid class 4 trade under the rules appertaining to a limited company. You will also avoid bankruptcy (personal) should you be the victim of a failed business.
