National Insurance Review
Many consultants have at least two sources of income – NHS and private practice income.
Both these sources of income are liable to national insurance contributions (NIC’s). A consultant will pay NIC’s on their NHS salary as well as NIC’s on their private practice income.
There is however a maximum amount of national insurance contributions which any individual tax payer has to pay in any year.
Normally, your accountant will be apply to have the national insurance contributions on private practice income cancelled or ‘deferred’. This is because normally a consultant will have paid the maximum national insurance contributions due on their NHS salary alone.
However, in our experience it is not uncommon for this “deferment” to be missed by an inexperienced or non-specialist accountant. If the accountant does not request that the national insurance contributions are deferred the consultant will pay more national insurance than is due. The Inland Revenue has no procedure to prevent this from happening and it would not be unusual for a consultant to pay £2,500 per annum in unnecessary contributions. The consultant receives no additional benefits for these additional contributions.
We can put you in touch with a specialist who will be able to calculate if you have overpaid National Insurance and obtain a refund for you if applicable.
“Article written by Debra Williams for Professional Medical April 2011”