@BuiltForComfort
As self employed there are 2 types of NI that you pay:
Class 2 NI is a fixed amount, now £2.70 a week, usually paid monthly or six monthly in arrears. Paying this clocks up time towards your Basic State Pension and entitles you (or your family if you die) to some benefits, mainly Maternity Allowance.
If you earn less than £5,725pa (or are making a loss) you can apply for exemption from Class 2, but because of the benefit accrual you should only think about this if you are already getting credit towards the basic state pension (e.g. if you are eligible for Child Benefit for a child under 12) and you are not going to qualify for Maternity Allowance.
Class 4 NI is basically just additional tax which is only paid by self employed people. Like income tax there is a threshold before you have to pay it, but at £7,755 (2013/14) this is now a fair bit below the income tax threshold. The amount you pay is calculated on your profit after allowable expenses, exactly the same as your profit for income tax purposes, and is due at the same time as income tax. The rate is 9% on profits between £7,755 and £41,450 then it falls to 2% in a similar way to Class 1 contributions for the self employed.
Many one-person business decide to operate as a Limited Company and take the majority of their income as dividends. Companies do not pay Class 4 NI so this can be a substantial saving.
Note that if you are over State Pension age (or younger than 16) you don't have to pay NI at all.
Finally Class 3 NI can be paid to make up years for the basic state pension: it is only worth considering this if you are nearing state pension age and you should take further advice.