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Where Taxpayers and Advisers Meet

NIC contributions adhoc employee

Eg95
Posts:5
Joined:Mon Feb 07, 2022 11:03 pm
NIC contributions adhoc employee

Postby Eg95 » Mon Feb 07, 2022 11:09 pm

Hello,
I run my own business as an individual on the side while being fully employed in another business. In my own business, I have gone over the £1k trading allowance this tax year Apr21/22 so will file for a self assessment before Oct 5th 2022.

I am wondering, if I were to employ someone for a weekend to help with the business, what the tax implications would be?

Would it be that aslong as I'm not paying them over £737 per month, I wouldn't need to pay National insurance on their behalf as an employer?

I wouldn't pay this much anyhow as would keep the wages that of what a usual days work would be keeping at arms length. And keep a record of the hours worked on a spreadsheet for a record on file.

Would this be allowable as a business expense as wholly exclusively paid in relation to the business and once paid through the business bank account, code this in the accounts as a wages expense?

This would be an adhoc wages paid to a family member. I would be interested to know when/if I'd need to use any special payroll software or platform for this.

I currently do my accounts through xero and plan to use this along side my regular employment payslips PAYE to calculate how much tax I need to pay.

I believe the amount of NIC I will need to pay HMRC will calculate after I'll submitted my self-assessment tax return?

Any information on this would be greatly appreciated.

Many thanks,
Edward

Eg95
Posts:5
Joined:Mon Feb 07, 2022 11:03 pm

Re: NIC contributions adhoc employee

Postby Eg95 » Tue Feb 15, 2022 10:21 am

bump

Appreciate any response or help with this. Thanking you in advance :)

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: NIC contributions adhoc employee

Postby darthblingbling » Tue Feb 15, 2022 10:24 am

How much will they be paid? NIC thresholds are based on pay period and I think the max is 31 days.

I think there is a deminimis for payroll, but it's very small.

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: NIC contributions adhoc employee

Postby darthblingbling » Tue Feb 15, 2022 10:25 am

Class 1 NIC that is

Eg95
Posts:5
Joined:Mon Feb 07, 2022 11:03 pm

Re: NIC contributions adhoc employee

Postby Eg95 » Tue Feb 15, 2022 4:06 pm

Hi thanks for the reply.. I would say around £40 for the month (£10 a day or helping each weekend as a small thank you sort of thing)

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: NIC contributions adhoc employee

Postby darthblingbling » Tue Feb 15, 2022 5:38 pm

HMRC guidance is £120 per week. In line with the lower earning threshold for Class 1 NIC.

https://www.gov.uk/new-employee/check-status

Give the amounts I'd probably say you're ok.

Eg95
Posts:5
Joined:Mon Feb 07, 2022 11:03 pm

Re: NIC contributions adhoc employee

Postby Eg95 » Wed Feb 16, 2022 12:28 am

Thank you for the link. Good food for thought. Your advice is appreciated :)

bd6759
Posts:4254
Joined:Sat Feb 01, 2014 3:26 pm

Re: NIC contributions adhoc employee

Postby bd6759 » Wed Feb 16, 2022 12:31 am

Be aware of National Minimum Wage requirements.

Eg95
Posts:5
Joined:Mon Feb 07, 2022 11:03 pm

Re: NIC contributions adhoc employee

Postby Eg95 » Sat Feb 19, 2022 11:44 pm

Thank you, yes I have seen it's rising to £9.50 next tax year. I have been reading the following: https://www.gov.uk/running-payroll/reporting-to-hmrc

I have seen Xero do do a payroll add-on to the software which looks good and easy to use. However an additional cost of £5 a month add on for up to 5 employees. Some food for thought for the next FY and tax year.


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