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<p>National Insurance contributions (NICs) are part of the UK’s social security system.
The system, based around the longstanding contributory principle, is centred around paid
employment and self-employment, with employers, employees and the self-employed paying
into the National Insurance Fund and providing funding for the NHS. Payment of NICs
builds an individual’s entitlement to claim contributory benefits which then replace
earnings in certain circumstances, for example if someone is unable to work or is
retired. Non-employment income is generally excluded from liability to NICs as it
is not derived from paid employment. Consequently, individuals with only non-employment
income need to pay voluntary NICs in order to build entitlement.</p><p> </p><p>The
Government keeps all taxes under review.</p>
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