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I am a company director - why am I not paying National Insurance straightaway?

I am a company director - why am I not paying National Insurance straightaway?

I'm a company director, so why am I not paying NI in April, May or June?

Directors' NI is usually treated differently to the way NI for normal employees is calculated. This is because HMRC wants Directors to have a cumulative NI allowance per tax year instead of a 1/12th allowance each month like normal employees.

This was put in place by HMRC because many directors were only being paid once or twice within the tax year which meant that the correct NI was not being calculated in that specific tax period.

As a result, directors now have an annual NI allowance meaning that they need to earn more than the annual Primary Threshold amount in each tax year before NI is due. This usually means that the Director will not pay NI in April, May or even June of each tax year as they would not have earnt over the annual 'Primary Threshold'.

Further Reading

If you would like more general information, the CA44 booklet from HMRC will give you further details and guidance on how Director NI is calculated.

What should I do next?

Please contact Marc Taylor if you would like to explore how our dedicated Payroll Team can help you with your specific National Insurance questions.

First Published 14 October 2020
Last Updated 14 October 2020

14 October 2020
First published.

Find out more about Marc Taylor

Marc Taylor

Marc Taylor

Marc is a Payroll Manager

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