National Insurance, Non residence, Non-resident Landlord Scheme

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Welcome to our Tax Glossary. Here you will find clear and comprehensible definitions of most of the tax terms you will face when dealing with UK income tax. This Glossary will help you understand the tax language, however it will not offer direct solutions to your tax issues. If you need further advice on any of those tax terms - just ask a tax adviser and get a free consultation right now!

Letter: N

National Insurance - Class 1: Employees and their employers pay Class 1 contributions. The contributions are based on a percentage of earnings. Payments made by employees are "Primary" contributions and those by employers are "Secondary" contributions. Primary contributions are not payable if under 16 years and over pension age.

National Insurance - Class 1A: These contributions are paid annually by employers on taxable benefits provided to employees that are not chargeable to Class 1 or Class 1B.

National Insurance - Class 1B: These are payable by employers who enter into a PAYE Settlement Agreement with the Inland Revenue.

National Insurance - Class 2: This is paid by individuals who are self employed and is a fixed amount paid direct to the National Insurance Contributions Office. There is a small earnings exception where if profits are below £4345 per annum an individual is excepted from making payments. These are not payable if under 16 years or over pension age at the beginning of the tax year.

National Insurance - Class 3: These are voluntary contributions and are paid by those who would otherwise not pay enough contributions to earn a full pension.

National Insurance - Class 4: These are paid by an individual who is self employed and are based on a percentage of profits above the lower limit which is currently equal to the personal allowance. These are payable to the Inland Revenue under self assessment. These are not payable if under 16 years or over pension age at the beginning of the tax year.

Non Residence Pages: A set of supplementary pages to the standard Tax Return form. It should be completed by individuals who consider that they were, for all or part of the year:

not resident in the UK, and/or
not ordinarily resident in the UK, and/or
not domiciled in the UK.

In general, one is resident in the UK if one spends at least half of a tax year here, or regularly spends at least a quarter of each tax year here.

Non-resident: If you live abroad and come to the UK you will be treated as not-resident if you spend less than 183 days in UK for a given tax year. If you normally live in UK you'll be treated as non-resident from the day after you leave the UK if:

you left the UK to go abroad permanently or your absence and full-time work abroad lasts at least the whole tax year
your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four years

For more information, please refer to our non-residence section.

Non-resident landlord scheme: The Non-resident Landlords Scheme is a scheme for taxing at source the UK rental income of non-resident landlords. The scheme requires UK letting agents to deduct basic rate tax from any rent they collect for non-resident landlords. If non-resident landlords don't have UK letting agents acting for them, and the rent is more than £100 a week, their tenants must deduct the tax. When working out the amount to tax the letting agent/tenant can take off deductible expenses.

Non-savings income: For tax purposes - one of the main types of income. It is the income from employment, self-employment, property, share scheme benefits etc. It includes Earned Income, but has a broader scope.

NRL6: A tax certificate which is to be completed by a letting agent or tenant who has deducted tax from the rental income of a non-resident landlord.