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Hello tutor,
Can you please explain class 2 … I see this Class 2 £2.70 per week
Small earnings exception limit £5,725… what is small earnings exception limit £5,725?I am not a tutor, but I can help –
Class 2 NIC applies to self-employed individuals, for which they have to pay £2.70 per week of trading. For example, if they trade for 12 months, what you would do is see how many weeks in a year (I believe a calculation based on 48 – 54 weeks is acceptable) and then times £2.70 by the number of weeks they have traded.
Example, John is self-employed and he has traded for 49 weeks for the tax year 2013/2014, what is his Class 2 NIC for 2013/2014?
It will just simply be £2.70*48 weeks = £129.60
Hope this helps.
If an unincorporated trader has an accounting profit (not tax adjusted trading profit!) below the small earnings exception limit then no class 2 NIC’s are payable, otherwise if the trader has traded throughout the tax year he will be required to pay class 2 NIC’s of 52 x £2.70
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