unpaid National Insurance

Possetjohn

As Edinvestor says they are not optional!

What I do not understand is how you have avoided paying them for all these years! Espeacially when you are paying Class 4 as part of your tax bill!

Quite new to the S/E lark myself but as soon as you register for self employment hmrc send you demands for them. No option to opt out unless you can get the small earnings exemption or are employed as well and pay sufficient Class 1 contributions.

This link to a site giving historical NI (and Tax) rates might be useful
http://www.taxhistory.co.uk/National%20Insurance%20rates.htm

According to this class 2 NI appeared in 1985 though some experts might know better

sleepless_saver

castle96 wrote: »

plus Pension Credits (if I dont have too much in savings)........ ?
Tops up to a full state pension I think ?
Seems 'unfair' on those who HAVE paid full NI.
Wonder what limit of savings, is

Do you live alone? Remember it is household income not individual income that is used in assessing pension credit entitlement.

castle96

many thanks folks. yes, live alone. No doubt my savings will exclude me from Pension Credit.
HOW did I 'evade' class 1??? I just stopped the monthly direct debit, a year or so into self employment and noone ever chased me - yet.

property.advert

castle96 wrote: »

many thanks folks. yes, live alone. No doubt my savings will exclude me from Pension Credit.
HOW did I 'evade' class 1??? I just stopped the monthly direct debit, a year or so into self employment and noone ever chased me - yet.

The only ever employed always wonder this. In my line it was get a permanent job, working for much lower salary, pay loads of taxes and hope for a decent bonus and then pay taxes on that or ditch the pension and holiday pay and go contracting and get about 3 times your previous money. It was a no brainer.

We should have paid NI but no-one did.

Cacran

Sorry to hijack the post but maybe you can help. My son was unemployed fr 6 months. He then got a job but it is only 12 hours a week, sometimes a few more if he gets overtime. He does not earn enough to pay NI contributons. Will they be credited for him or does he have to do something?? If he does...what does he need to do?

Oldernotwiser

Cacran wrote: »

Sorry to hijack the post but maybe you can help. My son was unemployed fr 6 months. He then got a job but it is only 12 hours a week, sometimes a few more if he gets overtime. He does not earn enough to pay NI contributons. Will they be credited for him or does he have to do something?? If he does...what does he need to do?

If he's working for fewer than 16 hours per week he can register for JSA which will pay his NICs.

Cacran

The job centre knew he had got a job for just 12 hours, no thanks to them as they didn't help him to get anything in six months that he was unemployed after his redundancy. You would have thought they could have told him about the NI contributions.
They have been so unhelpful during this awful time of mass unemployment. I don't think they know what to do themselves.

pmshrink

If you are divorced you can use your ex - spouses contributions to top up your pension. Also if you were looking after children from 1978 you can also get credits.

castle96

pmshrink
does that apply to man/wife and wife/husband ??!

Rich_

Sorry to Hijack but I'm in a similar position.

I'm approaching 28 and have been working as an actor for a children's theatre company for the past 7 years. During this time I have paid only class 4 contributions. This is because on the first year of my employment I recieved a letter stating that my NI contributions were short and that I could make them up with voluntary contributions (which I now understand to be class 3). I continued in my career believing that I could pay class 3 in place of class 2 opting year on year as to whether or not I wanted that tax year counted towards my state pension - Naieve I know.

After the first year however I didn't recieve any other letters regarding NI and in all honesty I didn't think anything more about it especially since my tax return calculated an amount of National Insurance for me to pay (this of course is class 4). I assumed (wrongly of course) that this class 4 was, "in place of" and not "in addition to" class 2.

The upshot of this is that I am now in a situation where I have only paid class 4 NI for the last 7 years and am worried that I may have inadvertantly commited an offense by not paying any class 2.

Now I want to rectify the situation but am unsure as to whether I will have to pay back the past C2 NI contributions (which seems likely) and whether or not I will incur any penalties for non-payment. The combined cost of which could bankrupt me as I have managed to save very little over the last few years.

The whole situation is confused by the fact that the rules for actors as I understand them are different. Because anyone who employs an actor on an equity (the actors union) based contract must pay class 1 NI on their behalf. The companies for which I have worked however do not use such contracts. This could explain why when I set up myself as self employed I was only registered for tax purposes and no direct debit was set up for class 2 contributions.

I really don't know what to do next...