Direct taxes are paid directly by the taxpayer to HMRC. How NIC is a direct tax when it can be paid by companies as well and not directly by employees?
Ask the Tutor ACCA TX-UK
NIC
Both Income tax and NIC are collected by the employer FROM the employees income - the employee does not PAY the NIC TO the employer.
A customer in a shop pays £120 to the shop including £20 of VAT - the shop must then account for the VAT to HMRC
That was really helpful and cleared my confusion. Thank you very much
I also wanted to ask if the employer pays NIC to the government after collection or it is the responsibility of the employee to file their income tax and NIC returns separately?
The employer is responsible for the collection at source of both employee class 1 NIC and income tax (through the PAYE system) and must pay this over to HMRC along with their own employers NIC
Thank you.
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