National Insurance Number (NI)

In order to start legally working in the UK you need to obtain National Insurance Number (NI). This is your registration number which is needed when you sign an employment contract. Employers need it to deduct your taxes, local authorities to provide financial benefits and it is also required for dealings with the Inland Revenue. Note that this is not optional – it is a requirement for everyone to have it. You are eligible for this card since you turn 16 years old. UK residents should receive the card automatically once they turn 16, however, new entrants to the country will need to apply.

How much is National Insurance Number?

• It is free! Be aware of any companies that may charge you to complete documents for National Insurance Number. The service is absolutely free.

What documents do you need to apply for NI?

• 3 confirmations that you are actively looking for a job. These can either be letters or emails with potential employer’s name and address or official email address. All these 3 confirmations can be easily replaced by 1 employment contract if you have already been offered a position. However, employers are not keen on issuing these before they have your National Insurance Number since this is the main proof you are entitled to work within the UK. To obtain these confirmations you will need to send out your CV to several places. When I was a student in my National Insurance Number meeting I presented an official interview confirmation from McDonald’s and a rejection letter from Greggs. I actually got away with two confirmations at the time but I am not sure whether this is always possible. It is sufficient to have an email saying “Thank you, we have received your application for the position and will be contacting you in due course”. It is one of examples how your confirmation may look like. So three of those and you can call to schedule your interview. You can of course arrange an interview in advance – just make sure you obtain these before you attend it.
• Confirmation of an address. If you are living with someone else and you are not paying any bills, have no bank account or mobile phone contract you are facing a bit of a problem. If you are a student you can ask your University administration to issue an official letter on a headed paper confirming your term time address. If the first option, you will need to open a bank account. Lloyds Bank is quite keen at opening accounts for new entrants into the country. You will need to bring a current account customer (may be your friend living with you) to vouch for you living with them. We have applied this is practice and it worked!
• Eligibility to work in the UK. There is no need to evidence this for European Economic Area (EEA) residents (this is EU plus Switzerland citizens). However, if you are from a country outside EEA you need to bring all the documents you possibly can in relation to your visa and confirming your identity.
• Proof of Identity. This is obviously your passport. According to the Government website a driving licence and birth certificate could also be used for the purpose. Please note that National Identity Card may no longer act for this purpose since the UK have recently started shifting from this kind of proof of identity claiming that they can be easily forged. For example, I once tried to using this in the currency exchange shop when trying to buy a lump sum of £££ and they have refused it. They said that I need to present either a passport or at least a driving licence.

You can read about a complete application process at HM Revenue & Customs website or on Gov.uk.

How to schedule an interview?

 You need to call Jobcentre Plus application line on 0345 600 0643. Lines are open 8.00 am to 6.00 pm Monday to Friday.

I have now mentioned the interview twice but I have not explained how this works. It is called an interview but as long as you bring all relevant documentation you will get your card. For the interview you will have to go to one of local Job Centres, this will be explained to you during the call.

Obviously you are going to be asked some questions. Such as relevant residency information (all of previous residential addresses including overseas), birth details (place, mother’s name, father’s name, siblings), purpose of coming to the UK (do not be afraid to say “to work” if that is true), etc.

As long as you do not make any major mistakes in your application National Insurance Number will arrive by post in around two weeks’ time . National Insurance Cards are no longer issued – you now only get a letter where your number will be stated. Please ensure you keep it safe or make a note of it elsewhere.

Temporary National Insurance Number

This is a code your employer used to use to complete your records while you don’t have a permanent one. Your temporary National Insurance Number is TN DD MM YY F/M. DD stands for your day of birth and MM & YY stand for month and year respectively. F/M stand for female and male. So if you are John Smith who is born in 1986 April 26, your temporary National Insurance Number would have been TN 26 04 86 M.

Employers are no longer permitted to use TN numbers and they will not be accepted by the Quality Standard. If the employer does not know an employee’s NINO when they submit their end of year return, they should leave the NINO box blank, enter the employee’s date of birth and gender in the appropriate boxes on the form, following the guidance in Employers’ Guidance, or on the HMRC internet site. In simple words: as of mid 2010, YOU WILL NOT BE GIVEN TEMPORARY INSURANCE NUMBER ANYMORE. You will always have to apply for a full NI regardless if it is a full-time job or just a short summer placement.

National Insurance Contributions (correct as at 1st February 2015)

These are different for employed and self-employed.

If you’re employed

If you’re employed you pay Class 1 National Insurance contributions. The rates are:

• if you earn more than £153 a week and up to £805 a week, you pay 12% of the amount you earn between £153 and £805;
• if you earn more than £805 a week, you also pay 2% of all your earnings over £805.

Your contributions are deducted from your wages by your employer.

If you’re self-employed

If you’re self-employed you pay Class 2 and Class 4 National Insurance contributions. The rates are:

• Class 2 National Insurance contributions are paid at a flat rate of £2.75 a week;
• Class 4 National Insurance contributions are paid as a percentage of your annual taxable profits – 9% on profits between £7,956 and £41,865, and a further 2 per cent on profits over that amount.

If your profits are expected to be less than £5,885 you may not have to pay Class 2 National Insurance contributions.

Your Class 2 National Insurance contributions payments are due on 31 January and 31 July, the same as a Self Assessment tax bill. You pay Class 2 National Insurance contributions either monthly or six monthly by Direct Debit – follow the first link below for more information about payment dates.

You pay Class 4 National Insurance contributions when you pay your Income Tax.

Source: HMRC