Taxes: National Insurance 2014/2015

 In addition to paying Income Tax, you'll also have to pay National Insurance (NI) contributions but before this happens, you need to apply for a National Insurance number as soon as possible after you arrived in Scotland.

A NI number must be provided to your employer as soon as possible after you start work. 

To get your NI Number, please read the article on National Insurance number.

Essentially, National Insurance contributions build up your entitlement to State benefits e.g. State retirement pension, the job seekers allowance paid to unemployed people seeking employment, sick pay, maternity leave.

How much National Insurance you pay depends on how much you earn and whether you're employed or self-employed. You stop paying National Insurance contributions when you reach retirement age.

Do I have to pay National Insurance contributions?

1. Yes, if you are over 16 years old, employed or self employed and you earn (1)

• between £153 and £805 a week. You’ll pay 12% of the amount you earn between £153 and £805.

• more than £805 a week. You’ll pay 2% of all your earnings over £805.

2. Yes, if you are over 16 years old and self-employed (2), then you’ll pay Class 2 National Insurance contributions at a flat rate of £2.75 a week.  If you expect your annual profits to be less than £5,885 you may not have to pay National Insurance contributions.

(1) & (2) rates are for the 2014-15 tax year.

Find out how to pay NI contributions

If you’re an employee, your NI contributions will be withheld by your employer through Paye As You Earn (PAYE) tax. 

If you’re self-employed, you must pay NI contributions to HM Revenue & Customs (HMRC) by direct debit paid monthly or quarterly.