Insurance FAQ
 

Claiming Tax Credit In US For UK National Insurance Contributions?

Question by boarder8464 | Posted in United States

I spent 4 months earlier this year doing an internship in the UK. I'm a tax accounting grad student in Texas and know my worldwide income is subject to US tax. I know the amount the UK withheld as an income tax is available as a tax credit in the US but wanted to know if the national insurance contributions can also be used as a credit? IRC code section or Treasury Regulation citations would be appreciated. Thanks!

Answer: Nope.

National Insurance is the equivalent of the paying fica/mc in the US.

Since the USA has a totalization agreement with the UK, there is no deduction. (If you get disabled or retire and are short some SSA credits to retire, the time in the UK is considered.)

Here's the rub. What visa were you on? I ask because a UK student doing an intership on an F-1 visa wouldn't have had to pay fica/mc and if they did could file for a refund.

Here's the statement from the Inland revenue site:

Coming to the UK from Social Security Agreement Countries
There are special rules if you are coming to the UK from:
 
 

Can I Pay National Insurance Contributions In Uk If Live In Austria?

Question by Ella | Posted in Insurance

I have moved to Austria from London and would like to know what happens to all the National Insurance I have paid? Should I transfer this to an Austrian Insurance company or do I keep paying in th UK? I'm lost! Any advise is appreciated!

Answer: It's not a savings account, it's a tax. You can't transfer it. That money went to pay for the expenses of the National Health system. It's gone.

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Should UK National Insurance Contributions Be Abolished And Simply Added On To Income Tax?

Question by Old Cynic | Posted in United Kingdom

This would make sense to me, just paying one single tax on income, rather than two, and not having all the nonsense of 44 qualifying years of contributions for a man, and 39 for a woman, to qualify for the full basic state pension. This would remove the need for the NI office so cost less to administer.

Answer: Your not the only one that thinks that, there is actually a think tank that has proposed this as a fairer means of taxation, but none of the major political parties will support it as it isn't deemed to be a vote winner. - See link below.

It's also a smokescreen for increasing taxes, it's not as obvious when the government tinkers with it, we all pay more than we used to.

If it was combined you would still need an NI office though (the government departments are already combined) as pensions and benefits would still need to be administered separately

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What Income Threshold In The UK Do National Insurance Contributions Apply To?

Question by Roman | Posted in United Kingdom

If someone earns under £75 per week are they liable to pay national insurance contributions?
and if not, will they still be liable to pay NI contributions throughout the tax year and file for a tax rebate at the end of the tax year?
Is there an income threshold which exempts people on very low incomes making periodic (monthly) NI contributions through out the year?

Answer: NIC isn't calculated on a cumulative basis like tax. Each payday is taken in isolation, NIC deducted accordingly if due. There is no provision for any refunds unless employer has made a mistake in the year. A person earning under £110 a week should not have NIC deducted. On £110 you pay 1p, it then works out at 11% of any excess.
A person on a low income which is under the limit should ask the Benefits Agency if there is any way they can get NI credits. Otherwise they won't be able to claim state retirement pension or certain other benefits.
See http://www.hmrc.gov.uk/rates .

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National Insurance Contributions UK...can Anyone Explain To Me Why...?

Question by Cocia Ŵyn bac yp | Posted in United Kingdom

...someone on £45,000 a year pays the same NI contributions as someone on,say £145,000 or even £450,000 a year? It doesn't seem very fair.
Kernow Lady...NI doesn't just pay for NHS service...and even if it did... people on £10,000 pay less than people on £20,000 up to around £40,000.....after that, even people on £500,000 pay the same.... strange!

Answer: I don't know. You will have to ask the Chancellors of the Exchequer, past and present, who set the limits, often without apparent rhyme or reason.
They did bring in Class 4 NIC to try to give parity between the employed and self-employed, as employees paid according to income with Class 1, and the self-employed had a fixed rate with Class 2.
I suppose they try to pretend it isn't a tax. If that is the case, why don't they ring-fence the money instead of putting it in general Government coffers?

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UK National Insurance Coverage Contributions | iPad Insurance

by Matt

Similarly if you’re self-employed and attain the state retirement age you immediately are now not required to make class 2 NICs, and from the tax year following the year you reached the state retirement age you are not required to make class four... National Insurance coverage is payable by all UK people aged over 16 that are both employed or self-employed and their incomes are above a certain level. National Insurance coverage contributions (NICs) are paid to build up a person’s entitlement to certain state benefits, together with the State Retirement Pension. {Two} components to class 1 contributions which are employee’s contributions are deducted from an workers pay. Employer’s contributions are paid by employers when they pay employees. Who pays National Insurance coverage....

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