National insurance contributions are paid by all employees over the age of 16 whose gross income exceeds the national insurance threshold and forms part of the taxes collected by the inland revenue. Employers also pay additional NI contributions. In years gone by there was not a record of being registered for taxes and national insurance but an actual national insurance card upon which were affixed stamps each week.
National Insurance Card – Providing Social Security Benefit
A NI Card is provided at the age of sixteen when we begin paying insurance independently of our parents or guardians. Employees under the lower age limit of 16 are exempt from national insurance contributions. It is a card which symbolises the system of taxes and social security benefits in U.K contains your unique NI number used to pay your NI contributions through, as long as you are resident in the UK. It was developed and is still controlled by the Inland Revenue and HM Revenue and Customs to provide the government, as well as consumers easy ways of paying taxes and is something that can be a similar technique to help you in business should you wish to start one. It was introduced keeping in mind the national insurance act of 1908 during the time of government expansion.
Taxes generally are made up of the tax paid by your employees, company earnings and other kind of benefits provided by the government and such taxes can also be termed as National Insurance Contributions. Any previous record of your contributions e.g. employment history are generally used to determine the availability and amount of benefit to be paid through taxes and this is where the NI Card is used by the Inland Revenue and HM Revenue and Customs.
National Insurance and Your Small Business
In business, the Government can keep your business declarations filed under your unique national insurance number to record your profit and losses and of course the amount of tax you and your business have paid because everything needs to be registered along with your NI number. The National Insurance Card is beneficial for you both personally and in business as it acts as evidence of your transactions and payments where taxes and contributions are concerned. Other countries have their own variations of a National Insurance Card but here in the UK it can be an additional item that acts as proof of your residential or working status. Employees from Outside the UK
The section of HM Revenue and Customs that deal with personal aspects of insurance contributions is the Department of Work Pensions also look after people who have come to the UK to find work and want to acquire National Insurance card. In any business where you plan to take on employees either temporarily or otherwise, you must always take the national insurance number from the employee in order to both identify the person and check their working status- in some cases a person may not be allowed to work for longer that a time specified by the Inland Revenue. It will also allow you to pay the correct percentage of their national insurance contributions and taxes. It is a good idea to obtain a copy of the passport in cases where your employees have not yet received a national insurance number or indeed do not yet know it.