Help - Non-payment of National Insurance

Ostrich · 5 July 2007 at 6:51AM

Hi Everyone
I've hopped from Debt-free wannabe forum as I thought all you tax experts might have an answer to my problem.
I've recently inherites some money which I have been using to pay off debts. But -and this is my biggest head in the sand confession: I stopped paying my National Insurance in 1992 as a result of stopping all my Direct Debits when I hit yet another financial crisis - yes that's how long it's being going on. I'm freelance so it wasn't taken directly from my earnings.
Three questions:
1. Does anyone know how much I am likely to owe now?
2. If I do 'fess up to the Revenue do they have powers to throw me into prison/impose any kind of punishment/fine? And how likely are they to do this? I'm terrified.
3. Also does anyone know how/if it will affect my future rights to benefits - I already fear I'm not eligible for any kind of pension. I was on the married woman's version of NI when I was younger and didn't work due to bringing up kids from 1973-1983.
Btw I am 57.
Thanks - and best wishes to you all.

Bean_Counter · 5 July 2007 at 7:33AM

Roughly how much were you earning during the period that you were not paying NI? It could be that you were below the payment threshold.

hopon · 5 July 2007 at 1:24PM

Also, for pension rights etc your required no. of years contribution is reduced for the time you are eligible to receive child benefit for under 16's so more than 73-83 would probably apply.

sharnad · 5 July 2007 at 5:25PM

if you should have been self-employed it will be 2.00 - 2.10 a week depending on the tax year.

It is currently £109.20 a year for class 2 ni

They might have waived some for you - the best thing to do if phone and ask

CIS · 5 July 2007 at 5:26PM

You need to get a pension forecast - https://www.thepensionservice.gov.uk.

Whilst you held the MWE and paid the reduced NI you wont accrue any pension rights and wont accrue any Home Responsibilities Protection.

The other issue is that for non payment (Class 2 , I presume), the revenue can force payment and then void the payments from counting as contributions for pension and benefit purposes.

CIS · 5 July 2007 at 5:33PM

if you should have been self-employed it will be 2.00 - 2.10 a week depending on the tax year.

It is currently £109.20 a year for class 2 ni

They might have waived some for you - the best thing to do if phone and ask

During the 90's and up to 99/2000 the Class 2 rate was in excess of £5.00 , and in the later period, £6.00.

Ostrich · 6 July 2007 at 7:09AM

Hi Everyone - and thanks ever so for all your comments and advice.
Bean counter: my income varied over the period from 21,604 (net profit) at worst to £33,675 best. Currently hovering around the £25,000 mark!
CIS: class 2 I presume - Yes.
Was out all day yesterday - today will try to pluck up courage to ring them. Deep breath.

hopon · 6 July 2007 at 11:24AM

Have you been submitting tax returns for all these years? If so you should have been paying class 4 ni contributions along with your tax so your pension rights should be ok but as CIS said, get a forecast done.

You'd also have a arguement for appealing as if you have been self employed and filing returns all these years then you would have hoped they would have realised that no class 2 was being paid at some point in the last 15 years....

Ostrich · 6 July 2007 at 12:04PM

Thanks you guys.
Hopon: yes i have been submitting tax returns and paying class 4.
Re: you'd have thought they would have realised. i think they did at first - i had some letters but then i moved and they stopped coming.
Then in the last year I got some monthly bills from NI. I paid one as I had the money but then disappeared down black hole again debt-wise and ignored subsequent ones. I think the last one said I owed about £800 - which could be 7 years worth? Someone on Debtfree forum said you could only pay back 7 years worth they thought.
Sorry reading all this makes me sound horribly irresponsible but it really has been fear and muddle that has kept me from facing up to it and contacting them. And I'm still scared witless.

Hoddie_2 · 6 July 2007 at 11:03PM

Unless you can persuade them that you didn't pay because of ignorance of your liability, or because an official error (ie they told you not to pay), for each year up until 1999/00 you'll be charged at a rate of £6.55/week or £340.60/year. For every year since you'll be charged £2.10/week or £109.20/year, except for the current year where the rate is £2.20/week.

AFAIK you will be charged for all the arrears but only the last 6 years worth of contributions will count for benefit purposes.

Class IV National Insurance contributions are not counted for benefit purposes; they are National Insurance contributions in name only.

A list of archived NI rates is available here.

CIS · 6 July 2007 at 11:16PM

Take a look here for HMRC guidelines
http://www.hmrc.gov.uk/manuals/nimmanual/NIM23000.htm

Help - Non-payment of National Insurance

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