ACCA TX-UK (F6) - Taxation Course - ACCA TX Course - Chapter 10: National Insurance (Part 1)

RESOURCES & LINKS Taxation (UK): https://www.gotitpass.com/tx Got It Pass: https://www.gotitpass.com Find me on Facebook: https://www.facebook.com/GotitPass This section discusses national insurance, which is an extra tax used to fund government services, particularly the welfare state and state pensions. It can be seen as a sixth tax alongside the standard five. National insurance applies to employees, employers, and self-employed individuals, categorized into different classes. Understanding how to calculate each class is essential for answering questions on national insurance in the TX paper. Class one national insurance is relevant for both employees and employers, while class two and class four apply to self-employed individuals. The focus here is on employee contributions, known as primary contributions. These are deducted from employees' gross pay and are applicable to all employees aged 16 years and above, but they do not count as an allowable expense for tax purposes. Employers also have national insurance contributions, referred to as secondary contributions. They are required for employees over 16 years old as well. Employers must note that these contributions add to the gross salary costs. An important aspect to consider is the annual employment allowance, which can reduce class one national insurance liabilities for employers, but there are exceptions, such as when the only employee is a director or when total employer liability exceeds £100,000 in the previous tax year. Additionally, class 1A contributions relate to taxable benefits and are assessed and calculated separately from class one contributions, which are based on wages. The discussion will continue into self-employed individuals in part two, followed by the presentation of tables to clarify the calculations involved. #acca #taxation #accacourse #accatraining #accaexam #accounting #uktax #uktaxation #uknationalinsurance #nationalinsurance