- This topic has 2 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
Hello sir,
sir in case of NIC do we need to apportion based on the number of months? As in if a trader commences trade on 1jan 2019 and earns trading profit of 10400 in the period ending 31march 2019 , so then in case of class 4 NIC do we have to do (10400-8632)*9%*3/12 or we do not have to multiply with 3/12(no apportionment required)???sir i think i have noticed an interesting thing. for an employee who has joined on say 1 jan’20 and has monthly salary of 3300, so the amount of class 1 employee nic for y/e 2019/20 would(9900-8632*3/12)*12%
but if there’s a sole trader or partner commencing or joining ,respectively, on 1 jan’20 having earned 9900by the first tax year end, then they have to pay class 4 nic (9900-8632)*9%. no apportionment of upper threshold here.
Is this how precisely NIC works?? as far as the proportionate part is concerned
Yes – in practice Class1 NIC is computed on a monthly or weekly basis depending on the period for which the salary / wage is paid – with both weekly and monthly limits used – in our exam we just time apportion to the nearest month for an employee who has started or ended an employment during the tax year.
For Class 4 NIC there is no time apportionment for a tax year in which a business may start or end, we simply apply the annual figures to whatever is the assessment for the tax year
- You must be logged in to reply to this topic.