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National Insurance Contributions (NICs)
When starting out in the world of work it’s important you understand the deductions that may be taken from your wage. National Insurance contributions are paid by all employees aged 16 or overproviding your earnings are more than a certain level. You can find out more about the rates and thresholds from the Directgov and HM Revenue and Customs websites. These contributions are usually calculated and automatically deducted from your wage/salary by your employer. National Insurance is paid in order to build up entitlement to certain benefits including Contribution-based Jobseeker's Allowance and a state pension which you receive when you retire.
National Insurance Number
You should receive your National Insurance number just before you reach the age of 16. This is your personal account number. You will need this number when you start work, claim benefits or apply for a student loan. If you are 16 and have not received this letter you should contact the NI registration help line on 0845 915 7006. You pay National Insurance Contributions (NICs) when you earn more than £7,225 per year.
Income Tax
You can earn up to £7,475 per year in employment before you start paying Income Tax on your earnings. This is called your Personal Allowance.Income Tax is used to pay for national services such as health, education, social security and defence.
Help lines
- NI registration help line – 0845 915 7006
Useful websites
HM Revenue & Customs
Collects and administers direct taxes paid on the capital you gain. Provides a useful guide to rates and allowances and a section on NICs providing lots of useful publications.
Directgov
Website of the UK government for its citizens, providing information and online services for the public all in one place, including further information on NI.
Student Tax Advice
This site was created to help answer students frequently asked questions about taxation and the minimum wage.
Online tools
Student Tax Calculator
See if you are entitled to claim a valid tax refund.
Universilly Challenged Game
Play HRMC’s ‘Universilly Challenged’ and see how much you know about tax and other quirky facts.
Last updated: 11/04/2011
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