Are you paying too much National Insurance?



1.For the tax year 2015/16 and beyond, National Insurance (NI) for the self-employed is all incorporated into the tax return and the tax calculation. 

2.Prior to that there was a two-step process, whereby class 2 self-employed NI was collected independently and class 4 NI was paid through the tax return, but, crucially, with no account being taken of any class 1 employee NI deducted from a salary that may potentially limit the class 4 due.

3.This could lead to overpaid self-employed NI.

4.We have helped clients get a refund of over £5000 plus interest.

5.In particular Hospital consultants employed by the NHS who also worked privately could be overpaying National Insurance contribution.

6.We don’t just prepare tax returns for clients, we engage in tax planning for clients as well.

Our experience has helped us uncover a catalogue of errors over previous years tax returns for five of our clients in similar circumstances this year, and this has helped us claim overpayment of NI contribution for these clients with interest.

7.We do this by reviewing the doctor’s last tax return, before the integrated 2015/16 system, which had been submitted by their previous accountant. This mostly reveals that the full rate of NI was being paid on both the doctor’s employed and self-employed earnings.

 8.If a doctor pays the full rate of NI for employed income, then the rate paid on any self-employed income, in this case the doctor’s private fee income, should be reduced. 9.Consequently, most doctors pay more than is needed.”

After we have obtained the necessary information, we calculate the refunds due for several years and make an application to HM Revenue & Customs on our client’s behalf.

This has led to each doctor receiving a refund of more £5,000 plus interest. 

Although there could be errors for our client for only a few years, there is no time limit for the application for a refund in these circumstances.  Some refunds could therefore be considerably higher.

 10.We come across similar cases frequently since it can affect doctors working as hospital consultants and also salaried GPs who earn non-NHS income.

In most cases we not only obtain a refund for NI contributions but also help reduce the doctor’s tax payments on account due for the subsequent year.

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Worried about paying too much tax ?