Self employment NIC class 2, small earnings / loss

monkeymonkey_3

I wonder if someone can help me with a query regarding class 2 national insurance contributions?

I am employed full time PAYE, and also registered as self employed for a business started in Sep 08. Since registering as self employed, I've been receiving bills for class 2 contributions. I'm embarrassed to say that as yet I have not paid anything towards this, as I kept intending to apply for exemption for small earnings. I did call hmrc months ago, and was advised to send the SEE form, and to apply for an absolute waiver for the period prior to the form. However, despite all good intentions I never quite got round to doing this I even half filled out half of the form but because I got confused with it, I never got around to sending it, so kind of buried my head in the sand and kept thinking 'I'll do it later'. I was waiting to do the form until I had got up to date with my accounts so that I would know a figure to enter for my earnings

So... finally got all my accounts up to date, and have now filed my online return and everything. For 08/09 I have actually made a loss, let alone small earnings. But my problem now is, I have realised that in order to claim exemption / refund for overpaid NICs, the deadline to claim is 31st Jan 10. So now I don't know what to do for the best? Will I have no option but to pay all they've asked, despite making a loss, seeing as I've not filled in an exemption form in time? Is there a fine for any arrears for NIC owing for 08/09 which have not been paid by 31st Jan 10?

As I say, I realise my ostrich approach hasn't been the best idea, and if I have to pay then I have to pay, but obviously I'd rather not pay if I legitimately don't have to. Thanks in advance if anyone has any advice.

Mr_Taxtastic

I would write to them and see what happens and knowing the Revenue, not much.

Yes you should of paid the NI or claimed the exemption but the loss to HMRC is insignificant. The main reason people really want to pay class 2 is for the state pension contribution but you are getting this through your employment any way.

I think the Revenue will at worst, charge interest, although I believe they can fine you. They will probably do neither.

Write to them stating you made a loss and that you are under the exemption limit with the completed form for 08/09 and may as well do 09/10 at the same time Apologise, say the forms were complex and that you do pay class one and see what they say.

The Revenue can be very forgiving at times so I would not worry.