The general principle of tax is the more you earn; the more tax you pay. However, there is an annual maximum amount of National Insurance contributions that are payable.
If you only had employment income, your employer would ensure that no more than the maximum annual amount was paid via the PAYE system.
However, where there is more than one employment or where there is a mixture of employment and self employment, there could be Class 1 contributions or Class 1, 2 and 4 Contributions respectively that exceed this maximum annual amount.
Excess payments can be repaid after the actual position has been calculated after the tax year end (5th April). Alternatively, you may make a claim that National Insurance contributions are deferred; any shortfall being paid once the correct position has been calculated after the tax year end.
I would encourage you to seek advice from a professional such as your local TaxAssist Accountant, as there are conditions you need to meet and a variety of figures and calculations you’ll need. Please feel free to contact us if you would like to be put in touch with your local office.
By Jo Nockels
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.