If you are self-employed and your profits are above £12,570, you may need to pay Class 4 National Insurance, so it is important to understand how the rates and rules apply to you.

Self-employed individuals are usually required to pay Class 4 National Insurance contributions (NICs) if their annual profits exceed £12,570. These contributions are calculated based on profits and are used to fund various state benefits, including the state pension, unemployment benefits and the National Health Service (NHS).

For the current 2025-26 tax year, Class 4 NIC rates are set at 6% on profits between £12,570 and £50,270, with an additional 2% charged on profits above £50,270.

Certain groups are exempt from paying Class 4 NICs, including:

• Individuals under 16 at the start of the tax year.
• Individuals over State Pension age at the start of the tax year. If someone reaches State Pension age during the tax year, they remain liable for Class 4 NICs for the entire tax year.
• Trustees and guardians of incapacitated individuals are exempt from paying Class 4 NICs on that income.

The Class 4 NIC rate is lower than the corresponding rate for employees, who pay 8% on the same income levels. Both employees and the self-employed contribute 2% on income above the higher rate threshold.

The majority of individuals pay Class 4 National Insurance via self-assessment.

Recently, a clear legal precedent confirmed that the nature of an individual's work is determined by the reality of the actual employment relationship rather than by arbitrary titles. Mr. Gooch worked for the British Free Range Egg Producers Association (BFREPA) from 1 November 2011 until 26 April 2024, initially as a Policy Director on a "contracted services basis" for 2.5 days per week. The organisation, originally an unincorporated association, subsequently became an incorporated company in 2023 (BFREPA Ltd.), although the nature of its work was unaltered.

As Mr. Gooch's role evolved, so his compensation increased and, by 2016, he had effectively been promoted to Chief Executive of Services. Throughout his 12.5 years of engagement, he consistently submitted monthly invoices and was paid a retainer due to his self-employed status, without formally establishing a limited company. In February 2023, BFREPA's leadership expressed concern that their arrangement with Mr. Gooch looked remarkably similar to an employment relationship rather than a self-employed contract, even suggesting that the HMRC would likely classify him as an employee. As a consequence, in March 2023, BFREPA gave him 12 months' notice of termination, and he continued working until April 2024, at which point his email access was disabled, and he received a letter confirming that his contract would not be renewed. Mr. Gooch duly lodged claims against both defendants for unfair dismissal, unauthorised deductions from wages, unpaid holiday, wrongful dismissal for failure to pay statutory notice, and breach of contract relating to pension auto-enrolment. 

The Tribunal ruled that the claimant was a de facto employee, working under a contract of employment as defined by Section 230(1) of the Employment Rights Act 1996, Section 2 of the Working Time Regulations 1998, and Section 88(2) of the Pensions Act 2008. The Tribunal further concluded that personal service was a core requirement of the contract, one which contained no general substitution clause, and that the extent of the control was consistent with an employer-employee relationship for a senior employee alongside other strong indicators of a permanent employment relationship. The contracts also contained restrictive clauses that limited his ability to work for other companies in the same sector, a feature more commonly found in employment contracts than in contracts for service. 

This ruling provides a clear and detailed example of how a tribunal will look beyond the contractual terms to assess whether a person is an employee or a self-employed contractor. Employers cannot rely on a "contract for services" or a person's self-employed status to avoid the legal obligations of an employer. Instead, tribunals will scrutinise key factors such as the mutuality of the obligations, the degree of control, and the extent of integration in the business. Employers who treat long-term contractors like employees—providing them with a fixed monthly retainer, dictating their hours, and effectively integrating them into the business—risk having them reclassified as employees, and HR departments should ensure that contracts reflect the true nature of the relationship to avoid repercussions.  

Change is part of every business journey. Whether it is prompted by new technology, regulation or shifts in the market, the ability to adapt determines how well a business performs in the long term. Yet managing change is not simply about introducing something new. It is about understanding what needs to change, why it matters and how to make the transition smoothly while keeping your team and clients on side.

The most successful businesses approach change as a structured process. It begins with recognising the need for change. This might come from declining profits, new reporting requirements, or a drive for greater efficiency. Once the need is clear, the next step is to define what the future should look like and what success will mean in measurable terms. For instance, a firm may aim to automate routine tasks, improve cash flow management or expand into new markets.

Good planning follows. This includes identifying resources, setting timelines, assigning responsibilities and communicating openly with everyone involved. People need to understand what is happening, when it will happen and what it means for them. Regular updates, clear information and honest answers help to reduce anxiety and build commitment.

Implementation is where plans become action. Training, testing and feedback are all essential at this stage. It is important to remain flexible and to make adjustments as issues arise. Small, visible wins also help to maintain motivation and demonstrate that progress is being made.

Once changes are in place, they need to be sustained. This means updating policies, embedding new processes into everyday work and making sure that improvements are monitored. Without ongoing attention, even successful changes can fade away over time.

Every change, whether large or small, brings both challenges and opportunities. The process can seem daunting, but a clear plan and the right guidance make a real difference. The aim is to move forward with confidence, maintaining control and ensuring that the change strengthens the business rather than disrupts it.

If you are facing a change process, whatever that might be, then pick up the phone. We can help you plan and meet your challenges.

For any business, knowing how to value and price what it sells is fundamental to success. Yet many small firms still rely on guesswork or simply copy competitors’ prices without understanding whether their own costs, quality or value proposition justify those figures. Accountants can play an important role in helping clients to take a structured approach to pricing and valuation, ensuring that products and services deliver both profit and sustainability.

Understand the true cost base
The starting point for any pricing decision is to establish the real cost of production or service delivery. This includes not only direct costs such as materials, wages and subcontractors, but also a fair allocation of overheads such as rent, utilities, marketing and administration. Once a business has a full understanding of its cost base, it can identify the minimum viable price required to cover costs and earn a profit margin. Accountants can assist by reviewing costing methods and ensuring that indirect costs are not overlooked.

Add value, do not just add margin
Too many businesses apply a simple markup to costs and call it pricing. A more strategic approach looks at the perceived value from the customer’s perspective. What problems does the product or service solve, how is it different and what benefits does it offer compared with competitors? Value-based pricing allows firms to charge more when the customer sees a clear benefit or saving. For example, if a service saves a client several hours each week, the price can reflect part of that time saving as additional value.

Use segmentation and flexibility
Not all customers are the same and pricing does not have to be either. Offering packages or tiers can help serve different market segments without undercutting core pricing. For example, a “standard,” “premium,” and “enterprise” level can target different budgets and expectations. Seasonal discounts, early payment incentives, or loyalty pricing can also be effective if managed carefully. The key is consistency and transparency.

Monitor performance and adjust regularly
Pricing is not a one-off exercise. Markets, costs and demand all change. Businesses should regularly review their margins, conversion rates and customer feedback to assess whether their pricing remains competitive and profitable. Accountants can add value by providing performance reports and benchmarking against industry standards.

If you would like help reviewing your pricing structure or working out how to value what you sell, please get in touch. We can help you analyse your costs, benchmark performance and design a pricing model that supports long-term profitability.

If you are UK resident and receive income from abroad, such as overseas wages, rent, or investments, you may need to pay UK Income Tax and report it through Self-Assessment.

Income Tax is generally payable on taxable income received by individuals including earnings from employment, earnings from self-employment, pensions income, interest on most savings, dividend income, rental income and trust income. The tax rules for foreign income can be complex. 

However, as a general rule if you are resident in the UK you need to pay UK Income Tax on your foreign income, such as:

• wages if you work abroad
• foreign investments and savings interest
• rental income on overseas property
• income from pensions held overseas

Foreign income is defined as any income from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign. Different rules may apply if you’re eligible for Foreign Income and Gains relief.

If you are a UK resident, then you will usually need to complete a self-assessment tax return for foreign income or capital gains. The main exceptions are if your only foreign income is dividends and your total dividends (including UK dividends) are less than the £500 or you have no other income to report.