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England and Wales > Debt Advice > Priority Debts > National Insurance Contributions (NICs)

National Insurance Contributions (NICs)

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There are four classes of National Insurance Contributions (NICs).

Class 1 NICs are deducted from an employee’s wages and paid by the employer along with income tax under PAYE.
Class 2 NICs are paid at a flat weekly rate by self-employed people (see our Tax sheet for the current amount).
Class 3 NICs are voluntary contributions paid to help people qualify for retirement pension and certain benefits.
Class 4 NICs are paid by self-employed people in addition to class 2 NICs if earnings are above a certain threshold (see our Tax sheet).

Class 1 and Class 4 NICs are collected by HM Revenue and Customs in the same way as income tax arrears.

Class 2 NICs are collected by the National Insurance Contributions Office and although they technically have the same powers as for Class 1 and Class 4 NICs, current policy seems to be to start proceedings through the county court (see What if a Creditor Takes Court Action?).

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