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National Insurance (NI)

The purpose of NI contributions is to build up your entitlement to certain benefits, including the State Pension.  Your National Insurance number is a unique personal account number. The number also acts as a reference number for the whole social security system.  You pay National Insurance Contributions if you are aged 16 or over and an employee or self-employed, subject to you earning over a certain level (£97 per week as of August 2006). The type and amount of NI you pay will depend on your personal circumstances.  If you don’t already have one, you will need to apply for an NI number.  For people living in Herefordshire, there is a telephone number to call to apply for an NI number (0845 6000643).  The only people/agencies who need to know your NI number are:

  • Her Majesty’s Revenue and Customs
  • Your employer
  • Jobcentre Plus
  • Your local council, if you claim Housing and/or Council Tax Benefit

Your entitlement to many benefits depends on the amount of NI you have paid, so it's very important not to give your number to anyone else.

 

Summary of the six classes of National Insurance contributions

Class

Description

Class 1            Paid by people who work as employed earners, and their employers.
Class 1A Paid only by employers who provide certain directors and employees with benefits in kind which are available for private use, for example, cars and fuel.
Class 1B Paid only by employers who enter into a Pay As You Earn (PAYE) Settlement Agreement (PSA) with HM Revenue & Customs for tax purposes.
Class 2

Paid by people who are self employed.

Class 3

Voluntary contributions paid by people who wish to protect their entitlement to the State Pension and who do not pay enough National Insurance contributions in another class.

Class 4

Normally paid by self-employed people in addition to Class 2. Class 4 contributions do not count towards benefits.

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Paying Tax

HM Revenues and Customs publish a helpsheet for migrant workers entitled “Working and paying tax in the UK – who to contact”.  This is available in nine languages other than English.  The helpsheet explains Tax, National Insurance, Tax Credits and National Minimum Wage. Go to www.hmrc.gov.uk/cnr/helpsheet_download_page.htm.

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Benefits

Entitlement to benefit depends on many different factors of your personal circumstances.  Your first port of call regarding benefits (with the exception of Housing and Council Tax Benefits – see below) is your local Jobcentre Plus, there are three in Herefordshire:

Hereford:

St Nicholas House
St Nicholas Street
Hereford
HR4 0DD

Tel: 01432 363600

Leominster:

Lion Court
Broad Street
Leominster
HR6 8JE

Tel: 01568 686969

Ross-on-Wye:

1-2 George Place
Ross-on-Wye
Herefordshire
HR9 5BS

Tel: 01989 793400

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Housing and Council Tax Benefit

Depending on your circumstances, you may be entitled to benefits to help you pay for your housing or Council Tax.  The Local Authority administers these benefits.  Your entitlement to these benefits will depend on completion of a “habitual residence” test.  Follow this link to the Herefordshire Council’s Internet pages regarding these benefits: http://www.herefordshire.gov.uk/health/social_policy/5825.asp.

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