Modifications etc. (not altering text)

C1Pts. 1, 6 modified (6.4.2001) by S.I. 2001/1004, regs. 1(1), 113, 114(2) (with reg. 138)

Part IU.K. Contributions

Modifications etc. (not altering text)

C3Pt. 1 modified (6.4.2001) by The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004), regs. 1(1), 125 (as amended (6.4.2017) by S.I. 2017/416, regs. 1(2), 2; (6.4.2019) by S.I. 2019/555, regs. 1(2), 2)

C5Pt. 1 modified (for the tax year 2022-23) by Health and Social Care Levy Act 2021 (c. 28), s. 5(2) (with s. 7(2)) (which Act was repealed (25.10.2022) by Health and Social Care Levy (Repeal) Act 2022 (c. 43), s. 1 (with savings and transitional modifications of Pt. 1 in s. 2, Sch. paras. 1-3, 5))

C6Pt. 1 modified (in relation to the tax year 2023-24) by National Insurance Contributions (Reduction in Rates) Act 2023 (c. 57), Sch. para. 1(1)-(3)

Class 4 contributionsU.K.

15 Class 4 contributions recoverable under the Income Tax Acts.E+W+S

(1)Class 4 contributions shall be payable for any tax year in respect of all [F1profits] which—

(a)are immediately derived from the carrying on or exercise of one or more trades, professions or vocations, F2...

(b)[F3are profits chargeable to income tax under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005] for the year of assessment corresponding to that tax year [F4and

(c)are not profits of a trade, profession or vocation carried on wholly outside the United Kingdom.]

(2)Class 4 contributions in respect of profits F5... shall be payable—

(a)in the same manner as any income tax which is, or would be, chargeable in respect of those profits F5... (whether or not income tax in fact falls to be paid), and

(b)by the person on whom the income tax is (or would be) charged,

in accordance with assessments made from time to time under the Income Tax Acts.

[F6(3)The amount of a Class 4 contribution under this section for any tax year is equal to the aggregate of—

(a)the main Class 4 percentage of so much of the profits F7... referred to in subsection (1) above (computed in accordance with Schedule 2 to this Act) as exceeds [F8£12,570] but does not exceed [F9£50,270]; and

(b)the additional Class 4 percentage of so much of those profits F7... as exceeds [F9£50,270];

but the figures specified in this subsection are subject to alteration under section 141 of the Administration Act.

(3ZA)For the purposes of this Act—

(a)the main Class 4 percentage is [F109] per cent; and

(b)the additional Class 4 percentage is [F112] per cent;

but the main Class 4 percentage is subject to alteration under section 143 of the Administration Act.]

[F12(3A)Where income tax is (or would be) charged on a member of a limited liability partnership in respect of profits F13... arising from the carrying on of a trade or profession by the limited liability partnership, Class 4 contributions shall be payable by him if they would be payable were the trade or profession carried on in partnership by the members.]

F14(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)For the purposes of this section the year of assessment which corresponds to a tax year is the year of assessment (within the meaning of the Tax Acts) which consists of the same period as that tax year.

Textual Amendments

F1Word in s. 15(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(2)(a) (with Sch. 2)

F2Word in s. 15(1) repealed (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(2)(b), Sch. 3 (with Sch. 2)

F3Words in s. 15(1)(b) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(2)(c) (with Sch. 2)

F4S. 15(1)(c) and preceding word inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(2)(d) (with Sch. 2)

F5Words in s. 15(2) repealed (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(3), Sch. 3 (with Sch. 2)

F6S. 15(3)(3ZA) substituted for s. 15(3) (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), ss. 3(1), 8(2)

F7Words in s. 15(3) repealed (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(3), Sch. 3 (with Sch. 2)

F10Figure in s. 15(3ZA)(a) substituted (6.4.2011) by National Insurance Contributions Act 2011 (c. 3), ss. 2(1)(a), 13(1)

F11Figure in s. 15(3ZA)(b) substituted (6.4.2011) by National Insurance Contributions Act 2011 (c. 3), ss. 2(1)(b), 13(1)

F13Words in s. 15(3A) repealed (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(3), Sch. 3 (with Sch. 2)

F14S. 15(4) repealed (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 420(4), Sch. 3 (with Sch. 2)

Modifications etc. (not altering text)

C7S. 15(3): power to amend conferred (1.7.1992) by Social Security Administration Act 1992 (c. 5), ss. 141(4), 192(4)

C8S. 15(3ZA)(a): power to amend conferred (1.7.1992) by Social Security Administration Act 1992 (c. 5), ss. 143(1)(4), 192(4)

16 Application of Income Tax Acts and destination of Class 4 contributions.U.K.

(1)All the provisions of the Income Tax Acts, including in particular—

(a)provisions as to assessment, collection, repayment and recovery, and

[F15(b)the provisions of Part VA (payment of tax) and Part X (penalties) of the Taxes Management Act 1970,] [F16and

(c)the provisions of Schedules 55 and 56 to the Finance Act 2009 [F17and of Schedule 38 to the Finance Act 2012],] [F18and

(d)the provisions of Part 4 (follower notices and accelerated payments) and Part 5 (promoters of tax avoidance schemes) of the Finance Act 2014,] [F19and

(e)the provisions of Schedule 18 to the Finance Act 2016 (serial tax avoidance),]

shall, with the necessary modifications, apply in relation to Class 4 contributions under this Act and the Northern Ireland Contributions and Benefits Act as if those contributions were income tax chargeable under [F20Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 in respect of the profits of a trade, profession or vocation which is not carried on wholly outside the United Kingdom].

(2)Subsection (1) above is subject to any provision made by or under—

(a)sections 17(3) and (4) and 18 below;

(b)sections 17(3) and (4) and 18 of the Northern Ireland Contributions and Benefits Act; and

(c)Schedule 2 to this Act.

(3)Schedule 2 to this Act has effect for the application or modification, in relation to Class 4 contributions under this Act and the Northern Ireland Contributions and Benefits Act, of certain provisions of the Income Tax Acts, and the exclusion of other provisions, and generally with respect to the contributions.

F21(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F22(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F15S. 16(1)(b) substituted (6.4.1996 with effect in accordance with s. 196 of the amending Act) by Finance Act 1994 (c. 9), Sch. 19 para. 45

F17Words in s. 16(1)(c) inserted (1.4.2013) by Finance Act 2012 (c. 14), Sch. 38 para. 53; S.I. 2013/279, art. 2

F18S. 16(1)(d) and word inserted (12.4.2015) by National Insurance Contributions Act 2015 (c. 5), Sch. 2 paras. 32, 33(1)

F19S. 16(1)(e) and word inserted (with effect in relation to relevant defeats incurred after 15.9.2016 in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 61(3)

F20Words in s. 16(1) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 421 (with Sch. 2)

F22S. 16(5) repealed (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), ss. 7, 8(2), Sch. 2

17 Exceptions, deferment and incidental matters relating to Class 4 contributions.E+W+S

(1)[F23The Inland Revenue may by regulations] provide—

(a)for excepting persons from liability to pay Class 4 contributions[F24, or any prescribed part of such contributions,] in accordance with sections 15 and 16(1) to (3) above; or

(b)for deferring any person’s liability,

F25...

(2)Exception from liability, or deferment, under subsection (1) above may, in particular, be by reference—

(a)to a person otherwise liable for contributions being under a prescribed age at the beginning of a tax year;

(b)to a person having attained pensionable age;

(c)to a person being in receipt of earnings in respect of which primary Class 1 contributions are, or may be, payable; or

(d)to a person not satisfying prescribed conditions as to residence or presence in the United Kingdom.

(3)[F26The Inland Revenue may by regulations] provide for any incidental matters arising out of the payment of any Class 4 contributions recovered by the Inland Revenue, including in particular the return, in whole or in part, of such contributions in cases where—

(a)payment has been made in error; or

(b)repayment ought for any other reason to be made.

(4)[F26The Inland Revenue may by regulations] provide for any matters arising out of the deferment of liability [F27to pay Class 4 contributions, or any part of such contributions,] under subsection (1) above, including in particular provision for the amount of a person’s profits or gains (as computed in accordance with Schedule 2 to this Act) to be certified by the Inland Revenue to F28... the person liable.

F29(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F30(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F24Words in s. 17(1) inserted (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), s. 8(2), Sch. 1 para. 4(2)

F25Words in s.17(1) repealed (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 6(a), Sch. 10 Pt. 1; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F27Words in s. 17(4) substituted (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), s. 8(2), Sch. 1 para. 4(3)

F28Words in s.17(4) repealed (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 6(b); S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

F29S. 17(5) repealed (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), ss. 7, 8(2), Sch. 2

18 Class 4 contributions recoverable under regulations.E+W+S

(1)[F31The Inland Revenue may by regulations make provision] so that where—

(a)an earner, in respect of any one or more employments of his, is treated by regulations under section 2(2)(b) above as being self-employed; and

(b)in any tax year he has earnings from any such employment (one or more) which fall within paragraph (b)(i) of [F32subsection (8)] of section 11 above but is not liable for a higher weekly rate of Class 2 contributions by virtue of regulations under that subsection; and

(c)the total of those earnings exceeds [F33£12,570],

he is to be liable, in respect of those earnings, to pay a Class 4 contribution F34....

[F35(1A)The amount of a Class 4 contribution payable by virtue of regulations under this section is equal to the aggregate of—

(a)the main Class 4 percentage of so much of the total of the earnings referred to in subsection (1)(b) above as exceeds [F36£12,570] but does not exceed [F37£50,270]; and

(b)the additional Class 4 percentage of so much of that total as exceeds [F37£50,270];

but the figures specified in this subsection are subject to alteration under section 141 of the Administration Act.]

(2)[F38In relation to Class 4 contributions payable by virtue of regulations under this section], [F39regulations made by the Inland Revenue may]—

(a)apply any of the provisions of Schedule 1 to this Act (except a provision conferring power to make regulations); and

(b)make any such provision as may be made by regulations under that Schedule, except paragraph 6 [F40or 7BZA].

Textual Amendments

F32Words in s. 18(1)(b) substituted (with effect for the tax year 2015-16 and subsequent tax years) by National Insurance Contributions Act 2015 (c. 5), Sch. 1 paras. 5, 36

F34Words in s. 18(1) repealed (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), ss. 7, 8(2), Sch. 2

F35S. 18(1A) inserted (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), ss. 3(3), 8(2)

F38Words in s. 18(2) substituted (25.2.1999 for specified purposes, 1.4.1999 in so far as not already in force) by Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2), s. 28(2)(a), Sch. 1 para. 7; S.I. 1999/527, art. 2(b), Sch. 2 (with arts. 3-6)

Modifications etc. (not altering text)

C9S. 18(1): power to amend conferred (1.7.1992) by Social Security Administration Act 1992 (c. 5), ss. 141(5), 192(4)

[F4118AClass 4 contributions: partnershipsU.K.

(1)The Treasury may by regulations—

(a)modify the way in which liabilities for Class 4 contributions of a partner in a firm are determined, or

(b)otherwise modify the law relating to Class 4 contributions,

as they consider appropriate to take account of the passing or making of a provision of the Income Tax Acts relating to firms or partners in firms.

(2)“Firm” has the same meaning as in the Income Tax (Trading and Other Income) Act 2005 (and includes a limited liability partnership in relation to which section 863(1) of that Act applies); and “partner” is to be read accordingly and includes a former partner.

(3)Regulations under this section may have retrospective effect; but they may not have effect before the beginning of the tax year in which they are made.]

Textual Amendments