Tax and National Insurance
What is income tax?
Anyone who is in paid employment normally has to pay income tax (also know as Pay As You Earn). You will be taxed according to your earnings. Tax is deducted directly from your pay via the College Payroll Office.
The College's Finance website contains comprehensive tax information for employees coming from overseas. The HM Revenue and Customs (HMRC) website will provide further information on international tax issues such as paying UK tax on overseas income or information on double taxation.
What is national insurance?
A National Insurance (NI) number is a personal number issued by the Department for Work and Pensions (DWP) and is used:
a) To record a person’s NI contributions and credited contributions;
b) As a reference number for the whole social security system.
Your NI number is personal to you. It is your account number for all dealings with the HMRC and the DWP. It is not proof of identity. It looks similar to this: AB 12 34 56 C.
If you delay obtaining a NI number this can affect your contribution record and delay payment of benefit if applicable. You should also show your NI number on any letters or forms you send to any part of the HMRC or DWP.
Coming to the UK from European Economic Area Countries (EEA)
There are special rules in force if you are coming to the UK from the EEA or Switzerland. Full details are available from the HMRC website.
How do I obtain a National Insurance Number?
Details of how to obtain a National Insurance number can be obtained from the Department for Work and Pensions.
The process for NI number applications is:
- Non EU nationals – if you who have not been automatically allocated an NI number with your Biometric Residence Permit you will be able to use the postal system provided you have a visa or residence permit. To request an application form you should telephone the DWP Contact Centre on their new Freephone number 0800 141 2309
- EU nationals – you will need to attend an Evidence of Identity interview at a Job Centre, taking along your passport or other form of identification. To arrange an interview, you should telephone the DWP Contact Centre on their new Freephone number 0800 141 2309
For more information on the Evidence of Eligibility Interview please visit Directgov.
Once you have been notified of your National Insurance number, please inform your HR representative as soon as possible, so that your records can be updated.
How are my National Insurance contributions collected?
Your Class 1 contributions are normally collected along with Income Tax under PAYE (Pay As You Earn). The College is responsible for paying your contributions and its own and it will be deducted from your pay automatically.
Your online salary information will tell you the amount of Class 1 NI contributions you have paid for that pay period. After the end of the tax year, the College will give you a Form P60 which will show you the total amount of Class 1 NI contributions you have paid in that tax year with the College.
Benefits from Class 1 NI Contributions
Class 1 contributions count for the following benefits:
- the basic State Pension
- the additional State Pension, sometimes called the State Second Pension
- Jobseeker's Allowance - the 'contribution-based' element
- Employment and Support Allowance - the 'contribution-based' element
- Maternity Allowance
- bereavement benefits - Bereavement Allowance, Bereavement Payment and Widowed Parent's Allowance
- Incapacity Benefit
Should you have a query regarding your National Insurance registration; please contact the HM Revenue and Customs helpline on 0845 302 1479. You may also wish to view the College Finance webpage on UK Income Tax and National Insurance.