A partnership is a business which is owned and managed by more than one person. The partners are jointly responsible for all aspects of the business and will share the profits. Partners will usually pay national insurance contributions on their share of the profits.

What is National Insurance?

National insurance contributions are compulsory payments made by employees, employers and the self-employed (including partners) towards certain state benefits. The contributions are made at various different rates.

You pay National Insurance if you’re:

  • 16 or over
  • an employee earning above £162 a week
  • self-employed and making a profit of £6,205 or more a year.

You need a National Insurance number before you can start paying National Insurance contributions.

How much National Insurance will I pay?

National Insurance contributions are payable by individuals between the ages of 16 and state retirement age.

For partners there are two types: 

Type of InsuranceAmount payable (2018/2019)
Class 2A flat rate of £2.95 per week if your share of profits exceed £6,205 per annum.
Class 4Based on the partners' profits: 9% between £8,424 and £46,350 and 2% over £46,350.

 

Use the HMRC tool to help you estimate your partnership National Insurance and tax liabilities. 

Download: National Insurance calculator

Download the attachment below to calculate how much National Insurance will you'll pay for 2018/19 and 2017/18. 

Click on the button below to download a copy. 

Self employed tax and National Insurance calculator.xlsx

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How and when will I pay National Insurance?

National Insurance contributions for partners are payable at the same time as the Income Tax is due.

Income Tax and National Insurance contributions for partners are payable by 31 January following the tax year to which they relate.

If the amount exceeds £1,000 an individual is required to make a payment on account for the next tax year.

Payments on account are due by 31 January and 31 July.

Do I need to register to pay National Insurance?

When you become a partner you will need to register with HMRC. This can be done online through HMRC.

The registration process will include details on how to pay National Insurance.

 

Should I consider paying voluntary contributions?

You may wish to consider paying voluntary National Insurance Contributions if there is a gap in your record. This will ensure that you are eligible to a full state pension when you reach state retirement age.

You may get gaps in your record if you don’t pay National Insurance or don’t get National Insurance credits. This could be because you were:

  • employed but had low earnings
  • unemployed and weren’t claiming benefits
  • self-employed but didn’t pay contributions because of small profits
  • living abroad.

For details on how to check your national insurance record go to https://www.gov.uk/check-national-insurance-record

Next Steps

Register with HRMC to pay National Insurance as a partner

You can register to pay National Insurance online via the HRMC website. 

Read more

More on National Insurance

You unique National Insurance number is used to make sure your National Insurance contributions and tax are recorded against your name only. You can apply for a National Insurance number if you don’t have one or find your National Insurance number if you’ve mislaid it on the GOV.UK website. 

Read more

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