Question 1c

The following tax rates and allowance are to be used in answering the questions.

National insurance contributions

Class 1 Employee 1-9,500 per year Nil

9,501-50,000 per year 12%

50,001 and above per year 2%

Class 1 Employee 1-8,788 per year Nil

8,788 and above per year 13.8%

Employment allowance 4,000

Class 1A 13.8%

Class 2 3.00 per week

Small profit threshold 6,365

Class 4 1-9,500 per year Nil

9,501-50,000 per year 9%

50,001 and above per year 2%

Question

A computer programmer. Until 5 April 2020 she was employed by computer plc but since then has worked independently from home. The programmer income for the year ended 5 April 2021 is 60,000. All of this relates to work done for Net Computer plc. The programmer expenditure for the year ended 5 April 2021 is as follows:

1. The business proportion of light, heat and telephone for Nana's home is 880

2. A motor car was purchased the programmer on the 6 April 2020 for 10,000 with co2 pf 105g/km. Motor expenses for the year ended 5 April 2021 amount to 3500 of which 40% relates to journeys between home and the premises of Net Computers Plc. The other 60% relates to private mileage.

Question

A computer programmer. Until 5 April 2020 she was employed by computer plc but since then has worked independently from home. The programmer income for the year ended 5 April 2021 is 60,000. All of this relates to work done for Net Computer plc. The programmer expenditure for the year ended 5 April 2021 is as follows:

1. The business proportion of light, heat and telephone for Nana's home is 880

2. A motor car was purchased the programmer on the 6 April 2020 for 10,000 with co2 pf 105g/km. Motor expenses for the year ended 5 April 2021 amount to 3500 of which 40% relates to journeys between home and the premises of Net Computers Plc. The other 60% relates to private mileage.

Required

i) Calculate The programmer liability to class 2 and class 4 NIC if she is treated as self-employed.

ii) Calculate the programmer liability to class 1 NIC if she is treated as an employee during 2020/21