Class 4 National Insurance

Class 4 NI is the National Insurance sole traders pay on their self-employment profits. It's collected through Self Assessment alongside income tax.

Current rates: 6% main rate on profits between £12,570 and £50,270; 2% upper rate above £50,270. These have been unchanged since April 2024 when the main rate was cut from 9% to 6%.

Mandatory Class 2 NI was abolished at the same time for anyone with profits at or above the small profits threshold (£6,725 in 2024-25, £6,845 from 2025-26). Below that threshold, Class 2 can still be paid voluntarily for state pension credits.

Related terms

• Payments on account — HMRC advance tax payments — half your prior-year bill, due 31 January and 31 July.
• Class 2 National Insurance — Flat-rate weekly NI for sole traders — largely abolished from April 2024, now only paid voluntarily below the small profits threshold.
• Personal Allowance — The first slice of income you can earn tax-free each year — £12,570, frozen until April 2031.
• Self Assessment — HMRC's system for declaring income not taxed at source — filed annually by the self-employed, landlords, and many directors.