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NIC

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › NIC

  • This topic has 5 replies, 2 voices, and was last updated 3 years ago by madni141.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • November 5, 2019 at 6:03 pm #551619
    madni141
    Member
    • Topics: 27
    • Replies: 16
    • ☆

    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?

    November 6, 2019 at 10:56 am #551677
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    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

    November 6, 2019 at 7:46 pm #551706
    madni141
    Member
    • Topics: 27
    • Replies: 16
    • ☆

    That was really helpful and cleared my confusion. Thank you very much

    November 6, 2019 at 9:59 pm #551714
    madni141
    Member
    • Topics: 27
    • Replies: 16
    • ☆

    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?

    November 7, 2019 at 1:02 pm #551770
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    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

    November 8, 2019 at 3:59 pm #551839
    madni141
    Member
    • Topics: 27
    • Replies: 16
    • ☆

    Thank you.

  • Author
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