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The same screen can be viewed for sole trades, partnerships and Lloyd's underwriters
The amount of class 4 NIC is calculated automatically. Class 4 NIC is not computed if Q18 is not completed when not self assessing.
HS220 - This information can be accessed via any business but it is stored once. In other words the data relates to the client not to the business. The same data can be viewed from any business. IRIS will automatically place the information on the first set of business pages where there are multiple businesses.
Reduction from profit chargeable to class 4 NIC, If you have any trading losses or interest which have not been deducted in calculating the trading profit then enter this amount in the. Where a loss arises on a trade and it is offset against other income (s380 claim) the profits for class 4 will automatically be reduced. If you do not wish to do this but retain that loss for set off against future class 4 assessable profits enter a negative amount in the reductions from profit field.
For example, the client has two trades, one making a profit of 60,000 the other a loss of 5,000 with a s380 claim. it makes sense to retain the loss for class 4 NIC purposes because 60,000 - 5,000 is still well above the upper earnings limit so the loss is wasted. Enter -5000 in the reductions from profit field.
Exception applies where the date of birth has been entered under client maintenance. IRIS will automatically exempt the payment of class 4 NIC for individuals that have reached state pension age before the start of the tax year. Entering Y into this option will remove any class 4 from the tax return and computations.
Deferment applies, the following reasons may give this entitlement:
Aged under 16 and the contributions agency has granted an exception
Not resident in the UK for tax purposes
A trustee
A diver or diving supervisor
A deferment may be possible if the taxpayer makes both class 1 and class 4 contributions.
Non-Resident liable to Class 4 NIC where the client is set as Non-Resident in the residence questionnaire the exception applies checkbox will be automatically selected. Under EC Reg 98709 – Article 14.8 NI liability will fall into the member state where the substantial self-employed duties/activities are carried out. Selecting this checkbox will ensure Class 4 NIC will be calculated on a Non-Resident client.
From the 2012 tax year onwards if a deferment has been granted; Class 4 NIC is payable at a reduced rate of 2% on all trade income above the Lower Earnings Limit.
