Just checking NI For OH - Not formally Self Employed

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  • atush
    atush Posts: 18,719
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    mark88man wrote: »
    I did check, but if you look at the website - the definition of self employed has a lot of things that weren't applicable. I know if you boil it down to basics she was earning money, and she wasn't employed by anyone else - I would define it more as casual labour than self employed/sole trader like tradesman for example

    for this tax year - how much would the class 2 NIC be as opposed to 700 quid for voluntary

    Nope sound SE to me.

    Try to look up Gadgetmind's psot on his wife's SE status? not to many hops to jump I think
  • mark55man
    mark55man Posts: 7,905
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    anselld wrote: »
    It should be her choice not yours. She is currently at risk of being fined for failure to declare self-employment. It should be her decision whether or not she wishes to rectify that situation regardless of the pension position.

    As far as HMRC are concerned there is no such thing as "casual labour" or "not formally self-employed".

    The HMRC were informed of the tutoring via comments in the self assessment - it was the HMRC guidance that we looked at, and it didn't seem to fit the definition.

    So to be clear, as is obvious, OH and I do this together, such as agreeing to reassess if we had made the decision, and she ensures her records are accurate and the SA tax return (which she has to do for other reasons) reflects this income, although I complete it for her review and approval.

    I appreciate your help, though as you have made it clear we need to do this more formally. And hopefully she (we) have time to get it sorted for this Tax year
    I think I saw you in an ice cream parlour
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  • mark55man
    mark55man Posts: 7,905
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    atush wrote: »
    Nope sound SE to me.

    Try to look up Gadgetmind's psot on his wife's SE status? not to many hops to jump I think

    OK - thanks atush.

    If you and Gadgetmind have a plan - its probably better than ours
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • jamesd
    jamesd Posts: 26,103
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    edited 12 March 2017 at 11:30PM
    She was self employed so she should make a call to the HMRC self-employed helpline and they can sort that out and maybe the class 2 NI as well. You can go back six years and get the years credited to the NI record as well.

    [STRIKE]There also seems to be a problem with the Child Benefit credits. The fact that income is over £60,000 means CB payments can be stopped or must be repaid but that shouldn't stop the named CB recipient of nothing from still getting CB's NI credits.

    If your children are over 16 but still in full time education or training see this to continue to claim the NI credits until she returns to employment.[/STRIKE]

    Don't worry about HMRC being unhappy, all they will be interested in doing is helping her to pay the NI and telling her to correct her tax return by filling in the self-employment instead of other income pieces. Very unlikely that they would even consider penalties since she did declare on her tax return even if wrongly. Even if they did, her approaching them would make the likely penalty about ten percent of the presumably nil extra tax due, so nil anyway.
  • p00hsticks
    p00hsticks Posts: 12,673
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    jamesd wrote: »
    There also seems to be a problem with the Child Benefit credits. The fact that income is over £60,000 means CB payments can be stopped or must be repaid but that shouldn't stop the named CB recipient of nothing from still getting CB credits.

    If your children are over 16 but still in full time education or training see this to continue to claim the NI credits until she returns to employment.

    According to this,
    https://www.gov.uk/national-insurance-credits/eligibility
    NI credits are only given to those claiming Child Benefit if the child concerned is under 12 - in post #3 the OP says that the youngest child was 14 when she stopped working, which would explain why she didn't get NI credits even though she was getting child benefit.
  • molerat
    molerat Posts: 31,702
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    edited 12 March 2017 at 11:14PM
    If she has 29 years it would only be worth purchasing 1 pre 2016 year, the 2nd would not add any value to her pension.

    Her current starting amount is based on the old system - 119.30/30*29 = 115.32 + add pen of 12.64 = £127.96. Adding 1 more year will bring that up to £131.94.

    Her current "new system" calculation is £110.06 (155.65/35*29-18.91) so the old cannot be bettered.

    With so many years left to get the 7 to make up to the maximum through employment there is probably little point in purchasing past years but it is your call.
  • jamesd
    jamesd Posts: 26,103
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    Looks as though sorting out the class 2 is worthwhile because it's cheap and will help with early retirement options before age sixty. Assuming there's some prospect of wanting that.
  • mark55man
    mark55man Posts: 7,905
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    molerat wrote: »
    If she has 29 years it would only be worth purchasing 1 pre 2016 year, the 2nd would not add any value to her pension.

    Her current starting amount is based on the old system - 119.30/30*29 = 115.32 + add pen of 12.64 = £127.96. Adding 1 more year will bring that up to £131.94.

    Her current "new system" calculation is £110.06 (155.65/35*29-18.91) so the old cannot be bettered.

    With so many years left to get the 7 to make up to the maximum through employment there is probably little point in purchasing past years but it is your call.
    Thank you - we have just submitted the self employment registration. her income was 7.5K last tax year and this tax year so I think she will have to pay class 2's before 14/15 she was employed or on CB (with children <12 so earning NIC credit)

    I think we may end up having to get 2014/2015 and 2015/2016, and then 2016/2017 will follow in due course - but then after that we should only need 3-4 more. Early retirement is a nice thought, but I think will be 60ish at the earliest
    I think I saw you in an ice cream parlour
    Drinking milk shakes, cold and long
    Smiling and waving and looking so fine
  • molerat
    molerat Posts: 31,702
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    Whatever is paid pre 2016 will only bring up to £131.94 leaving another 6 post 2016 to get the full amount.
  • jamesd
    jamesd Posts: 26,103
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    There's no benefit in getting to more than thirty years before 6 April 2016 for her so if she has the choice just one of those years would be better than two. But whether she gets the choice will depend on her income in those years, might be mandatory. Class 2 is so cheap that it's not a big deal.

    On the early retirement side I'm not sure whether we've discussed the great deals that those who are approaching and over 55 can get from pension contributions. DB then taking 25% tax free lump sum each year can be great if you can afford it. Can potentially eliminate the income tax on around a quarter of pay for many years and be a great way to build up funds for early retirement.
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