HMRC allows alternative arrangements for the assessment and payment of NICs for company directors. Liability to NICs for company directors is calculated using an annual earnings basis. However, subject to the qualifying conditions set out below, payments on account of directors’ NICs may be made during the year based on the actual intervals of payment, usually weekly or monthly, in the same way as for other employees.

The calculation

The following procedure can be applied to determine the contributions payable in respect of a director’s earnings each time a payment is made.

Step 1

Use an annual or pro-rata annual earnings period to calculate NICs.

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