Alan Pink looks at ways that businesses can avoid overpaying National Insurance contributions to HMRC.
National insurance contributions (NICs) are often overlooked in tax planning, but are a major source of income for the Government. Many regard NICs as being no more, effectively, than another tax. I have to say that this point of view has a lot going for it.
First of all, let’s look at the basics. If you’re a sole trader or a partner (including a ‘partner’ in a limited liability partnership), some of the ways of saving NICs are the same as straightforward planning techniques to cut down the size of your income tax bill.
For example, if you’re a sole trader liable to NICs at the self-employed rates on all your income over about £12,500 a