Money

National Insurance & Tax

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National Insurance

Paying National Insurance contributions and taxes is a nasty but inevitable fact of adult life.

You are given a unique National Insurance (NI) number when you're 16, sent to your home address on a plastic card. It’s important to keep it safe as you will need it when you start work or try to claim any kind of benefits. Most people who work have to pay National Insurance contributions and these are taken directly from your wages. The contributions you pay count towards some benefits and also your state pension.

If you don’t have a NI card or have lost yours, you can contact the NI Helpline on 0845 600 0643

With effect from 17 July 2006 the initial point of contact for all customers with enquiries or wishing to apply for a NI number will be via this number.

The Department of Work and Pensions answers the following questions about National Insurance numbers:

• What is a National Insurance number?
• Where to apply for a National Insurance number
• When you can apply for a National Insurance number
• Evidence of identity interview
• Types of evidence and information

If you have lost or can't remember your NI number you may be able to find it on official paperwork you have at home such as a payslip or a P60 which is a statement of tax at the end of each financial year. However if you still can't find it contact your loal Job Centre and they'll tell you waht to do.

Income Tax

Your NI number never changes, even if you go abroad, marry or change your name.

You will also have to pay Income Tax once you earn over £5035 per year (2006/2007). The more you earn, the more tax you pay. The money raised through Income Tax helps pay for things like education, hospitals, social security, police and defence. Your employer will work out how much you have to pay and, like National Insurance, take it directly out of your wages.

You won't have to pay tax on student grants and loans, housing benefit or money you receive from your parents. If you earn less than £88 a week then you shouldn't be taxed, if you are a student you shouldn't be taxed if you work during the holidays.

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Page updated: Sunday, March 9, 2008 8:57 AM