[kinyuwong]

Thanks tutor!

[kinyuwong]

Thanks a lot!

[kinyuwong]

Thanks!

[kinyuwong]

Thanks a lot!

[kinyuwong]

Sure, this is the info on the question (From BPP practice kit Q5)

Nelson is to determine if he should have been advised to begin trading through a limited company from 1 June 2021 rather than as an unincorporated business.

Assumption:
1) company’s accounting period ends on 31 March 2022
2) the company’s monthly trading profit for this acc period is 7050. this figure is before deducting the cost of Nelson’s monthly salary.
3) the company pays Nelson’s a gross salary of 1200 per month and a dividend equal to its post-tax profits.

From BPP practice kit Q5

Employer’s class 1 national insurance contributions (NIC)
£4,980 (£12,000 – (£8,788 x 10/12)) x 13·8%

Employee’s class 1 NIC
£4,083 (£9,500 – (£8,424 x 10/12)) x 12%

My questions are
1) Why is that there is a time time apportion on the lower bound of employer and employee Class NIC?

2) Where does the £8,424 come from?

[Author]

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