Ni Help

[savagj1]

My hubby is self employed and I've just discovered his NI payments have not been paid for some time. I want to get this sorted for him but I'm unsure if I contact them to start the payments again, will they make him pay any back dated monies that he's missed? Or can we just start from scratch? I think it's been about 4 yrs since he's paid yet don't understand why he hasn't been chased as they have our address, etc - I remember paying a £30 ish payment for him at one time via Post Office!

[Old_Geezer]

I am no expert but I though many folk fail to contribute throughout their life and are ok so long as they have paid in sufficient to cover the number of years requirements for benefits. I don't know whether one can choose not to contribute when working though. Usually it's because one is out of the workplace. Doesn't the http://www.hmrc.gov.uk/ni/index.htm website help ?

[savagj1]

The website isn't too clear or I'm being soft. To be honest my head is a little up the wall about it as I've only discovered this since he has been unwell!! Typical! Just want to make sure he is paying what he should for the future should anything happen

[DocHH]

Hello savagj1,

I am self-employed and receive a form from HMRC twice a year in reference to Class 2 NICs, it used to be 4 times a year. It states how much is due and for the period it is due, viz 07-04-2013 to 05-10-2013. At the bottom of the form is a payment slip.

There is extra text on the form, verbatim this is,

"Tell us now if you're no longer self employed as you may not owe this. If you pay late or do not pay you may lose your right to State Pension and benefits. If you fail to pay a private debt collection agency may contact you , or we may collect what you owe through your tax code."

The form continues with details of outstanding liability periods.

As far as I am aware any NICs over and above Class II are collected through the Income Tax system, and each year's, albeit previous year's liability will be calculated based on his annual declaration of income on an annual Tax Return Form.

I suspect that it will be your choice with regard to payment of unpaid NICs, but it is quite likely it could affect State Pension Rights.

The telephone number for HMRC, based in Longbenton, Newcastle-on-Tyne at the top of my form for Class 2 NIC is;

084591 54655 I think you should contact them as soon as possible, this is a situation that needs resolving, it will not go away if ignored, but I suspect you are aware of that. I am sure they will be very helpful.

Alarm bells started ringing when I read your post, if NICs are not up to date, what about Income Tax? Does he have an Accountant? Everyone has different circumstances. The majority of my income is from Pensions and Investments, but I run a small Consultancy, which means I get involved with NICs, I am still of an age where I am obliged to pay NICs. However I hope the above is of assistance.

I wish you good luck with this problem, but from the tenor of your original post I suspect you have the determination to sort things out.

[furrypusscat]

You can pay voluntary contributions to cover any shortfall. It depends on his contribution record as to whether he will be entitled to a full state pension and whether he has enough working years left to make up the shortfall or whether he pays it back now.

[buildersmate]

Does he complete a self-assessment tax return each year?
If he does, I do not understand why this has not been picked up within the return.
One of the questions early in the return confirms the self-employment status, which then drives the inclusion of NI Class 2 and sometimes Class 4 contributions, based on his net income. These then get paid along with any SE tax required.
At least that is my understanding.

[savagj1]

Yes we used to get the giro forms to the house but they stopped some time ago so I've found out, I think this was 2009!!!

BuildersMate : are you saying that when we pay his tax through the online Tax Assessment form, some of this payment is for his NI (sorry you got me confused a bit)! Surely if they haven't been sending him his 2 yearly bill then that is not his fault. Do you maybe not have to pay any NI if you salary is below a specific amount?

[boxtops]

Best to check here..

http://www.hmrc.gov.uk/ni/volcontr/toppingup.htm#top

Specifically..

Deadlines for making up National Insurance contribution gaps

You usually have to make up the gaps within six years of the end of the tax year for which the National Insurance contributions are being paid. However there are extended time limits for some tax years and special rules if you reach State Pension age either between 6 April 2008 and 5 April 2015 or after 6 April 2016.

For more information on deadlines, and the extended time limits, for paying voluntary National Insurance contributions read our guide 'When and how to pay voluntary National Insurance contributions' by following the link below.

http://www.hmrc.gov.uk/ni/volcontr/whentop-up.htm

[buildersmate]

No, this isn't to do with voluntary contributions. This is to do with one's responsibility to pay NI when one is self-employed.
So I suggest you look at this link.
http://www.hmrc.gov.uk/working/intro/class2.htm

Class 2 contributions are a flat rate £2.75p per week unless one earn less than £5885 per year. So at £140 per annum, this hardly breaks the bank. This appears to be what DocHH is talking about above. Looking at the link, it seems one registers separately for this with HMRC.

You also need to look at the link to the LHS of the webpage I have provided to look at Class 4 contributions which are payable in addition. This is what was remembering and the calculation occurs when you complete the SE tax form. Class 4 contributions are far more onerous and are levied at 9% of annual net profit above £795 per annum, up to a top limit.

I don't know what sanctions if any HMRC apply to a self-employed person who has managed to avoid paying the necessary NI. You will have to ring and ask.

[buildersmate]

£7956 per annum