Does My Tax Return Bill Include National Insurance?

Understanding your income tax bill can be confusing. One common question is whether National Insurance contributions is included in your income tax bill. Let’s clarify how it works.

National Insurance is different from income tax, even though they are similar. The money paid goes into a government fund used for state benefits like the state pension, statutory sick pay, and maternity leave.

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How Your Tax Return Works

When you complete your tax return, it considers all your income. This includes:

• Employment

• Self-employment

• Dividends

• Rental income

• Pensions

• Other sources

The amount you earn / profit recorded on your tax return determines what taxes you need to pay, including National Insurance.

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You should see a breakdown of taxes

At the end of the tax year, your accountant will provide you with a final amount to pay to HMRC. This amount typically covers all the taxes calculated from your tax return. It includes:

• Income tax

• National Insurance contributions

• Other applicable taxes, such as student loan repayments

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Breakdown of the Tax Bill

Your accountant or your completed self-assessment should provide a breakdown of the total amount. This breakdown helps you understand what portion of your payment goes towards each type of tax.

Example Breakdown

Here is a simple example to illustrate how your final tax bill might look:

In this example, if your accountant asks you to pay £3,600 to HMRC, the breakdown shows how much of that total is for income tax, National Insurance, and student loan repayment.

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You may need to pay an extra 50%

If this is your first time paying over £1,000 in tax, you may need to pay an extra 50%. This is called a payment on account. We've written a blog about it if you need help understanding it, read 'Understanding HMRC's Payment on Account Scheme'.

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Why This Matters

Knowing that your final tax bill includes National Insurance and other taxes helps you plan your finances better. Understanding the breakdown of your payment ensures there are no surprises.

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Final Thoughts

Your income tax bill can include National Insurance contributions. The comprehensive amount is what you pay to HMRC at the end of the tax year. Always ask your accountant for a breakdown to understand your tax obligations clearly.

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Need help with your tax return?

Blue Rocket Accounting help self-employed business owners, landlords higher PAYE earners and more with their tax returns around the Dartford area, including Bexley, Erith and Crayford, and the surrounding regions. It’s a confusing tax world, and we at Blue Rocket work to protect our clients from that confusion by keeping them compliant, legal and tax efficient.

If you are based within 25 miles of Dartford, Bexley, or any nearby areas and would like expert help, then contact us now.

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