NI as a director

[mr2turbogts]

From the 1st Sept I became a director for the company I work for.

I have received my pay for October to find out my NI contributions have over doubled.

Our accounts are telling me this is correct as I will be charged 8% on the 1st 50k as a director then 2% after, however what happens to my previous earnings before Sept, do these not get accounted for?

Also will this reset in April as I wont earn 50k from now to April, so will be stuck shelling out NI for the foressable future

[trickywoo]

Being a director itself doesn’t usually change the NI. Has your tax code changed?

[IJWS15]

IIRC tax code has nothing to do with NI, being a director might. HMRC website will tell you.

https://www.gov.uk/employee-directors

[Eric Mc]

Directors pay the same levels of NI as an employee does. However, the WAY in which the NI is calculated is different. Essentially, for employees, the NI is spread evenly over each salary payment. For directors, NI is charged only when the accumulated salary breaches the NI threshold.

By the time you get to the end of the tax year, for any given Gross Salary amount, a director will have paid the same NI as an employee.

[IJWS15]

I don’t recall it being an enormous sum when I was a stat. Director but (following our accountants advice) I didn’t pay myself very much.