Not entitled to a penny!

theworldsgonemad

When I became self employed as a sole trader the first thing I did was get an accountant. I duly paid my £11 or £12 a month for NI contributions BUT when my accounts were done at the end of each year, I was told how much tax I needed to pay AND on top of this I also would need to pay 8% of my income for the extra NI I HAD to pay.

I never had a problem with this because as far as I was concerned every self employed person had to do the same.

Now I read on here that most self employed people are only paying the £11 or £12 a month and that's it?!

Am I right or am I reading this all wrong?

Welshwoofs

theworldsgonemad wrote: »

When I became self employed as a sole trader the first thing I did was get an accountant. I duly paid my £11 or £12 a month for NI contributions BUT when my accounts were done at the end of each year, I was told how much tax I needed to pay AND on top of this I also would need to pay 8% of my income for the extra NI I HAD to pay.

I never had a problem with this because as far as I was concerned every self employed person had to do the same.

Now i read on here that most self eployed people are only paying the £11 or £12 a month and that's it?!

Am I right or am I reading this all wrong?

Well I'm certainly not here with ready answers for you lol. My OH did the same as you, handed it all over to an accountant who told him what to pay. I don't know what the percentage was, but he was certainly paying more than £11/£12 a month!

It seems there are different levels of NI .... but I'm clueless about it. All I know is that when my OH had no work (a period of about 6 months) he was told that as he was self-employed he could not claim JSA

itsnotfair_2

My OH became self employed as a teenager in the 1970's.
He paid accountants to tell him what he should pay.
NI at class 2 was all he was told. Tax at whatever it was at the time.
In later years I was told people could pay class 4 to increase pension beneifts. I applied to the NI people and was told we could not. I was told if we wanted increased pension rights my OH should stop being self employed and become employed.
Fast forward to 1999. Oh hard luck you have not paid enough contributions.

Oldernotwiser

Welshwoofs wrote: »

None of those however are much use if you are an able-bodied male who is simply getting no work in.

Unfortunately in this recession I know of a few chaps who were self-employed in the trades and have gone under spectacularly and have had to survive whilst finding work with no money coming in. What on earth are they expected to do if they have no wife/partner/parents to prop them up whilst finding work?

Again, why is it that someone who has never worked (and therefore never paid any NI) can claim JSA, but a self-employed person who has worked and contributed to NI cannot? That is not a fair system. I fully advocate withholding JSA from able bodied people who've not contributed enough NI....but I think it should be applied to everyone not a select few. In short, they are penalising enterprise and rewarding laziness.

Self employed people who are single can claim means tested JSA as well as help with housing. It's only when you live with someone who brings in an income that you receive nothing, because it's considered that couples will support each other during unemployment.

Oldernotwiser

theworldsgonemad wrote: »

When I became self employed as a sole trader the first thing I did was get an accountant. I duly paid my £11 or £12 a month for NI contributions BUT when my accounts were done at the end of each year, I was told how much tax I needed to pay AND on top of this I also would need to pay 8% of my income for the extra NI I HAD to pay.

I never had a problem with this because as far as I was concerned every self employed person had to do the same.

Now I read on here that most self employed people are only paying the £11 or £12 a month and that's it?!

Am I right or am I reading this all wrong?

You have obviously had a sensible accountant who has advised you to pay class 4 contributions that cover you for unemployment benefits; this is what you get for the extra 8%. Those who just pay the £11/12 per month aren't eligible because they contribute far less.

sammyjammy

I cannot believe that there are so many people that go self employed without a thought as to the future and how this affects them, all this I didn't know....... don't you think it was your business to make an informed decision?

sammyjammy

zenmaster wrote: »

From the DWP website -

If you have your payslips (if not, why not? ) then you can verify this by checking the December of each year. There will be a field called something like "NI Pay". This should exceed £4200 in each case. If it does than query it with the jobcentre as they may have made a mistake. If it does not then you should probably have a word with your accountant.

A tax year goes from 6th April to 5th April the following year not January to December. If your quote is from DWP website please provide a link.

p00hsticks

Welshwoofs wrote: »

Again, why is it that someone who has never worked (and therefore never paid any NI) can claim JSA, but a self-employed person who has worked and contributed to NI cannot?

Are you sure that what you are saying is true ? People who haven't made sufficient Class 1 NI contributions - which include those who have never worked and those who are self employed - won't be entitled to Contributions based JSA.

I may be wrong (and would welcome being corrected if you can show me that I am) but I suspect that, like people who have never worked, those who were formerly self employed coudl submit a claim for income based (means tested) JSA provided they fulfil the criteria that they are available and looking for work.

Indie_Kid

itsnotfair wrote: »

We were told by DHSS we should have saved for such an eventuality.

But how many people actually think one day that this will happen to them? My parents certainly didn't. (well, with them it was a mixture of being told dad couldn't work for 2 months, company going bust, getting a new job and the new comapny going bust a few months later)