NI contributions.

legoman

Hi,

Bit of a dilema. I'm at work at the moment so I don't have the exact amounts. I have moved house recently and got a letter through about what I owe for National Insurance and it's in the region of £500. Now, I'm assuming that these were going to my old address but I asked and there is no trace of any other correspondence so I guess they've been binned by the occupents. :mad:

I am currently in an IVA so obviously I cannot afford this at all and when I asked Payplan they said they are unable to add this to the IVA and to contact The Inland Revenue. I thought this was the best place to come to first for any advice and if anyone can advise me on what the best plan is given my situation.

I am classed as self employed and also work with my Father paying tax on that job too. I don't earn enough to be taxed for my self employment so each year I'm told to pay nothing. I was advised by my Father's business accountant to do it this way but I got a job with my Father after being unemployed and it was all set up pretty quick, hence my confusion and naivety until this came up.

I'm all a bit confused really and having sorted out what I thought was all my debt this pops up.

Thanks in advance for any help!

Tixy

What does the letter say - which national insurance class of contibutions do they claim you owe? (it will be either 1, 2 or 4). What period does it say it is for?

How long have you been self-employed? have you paid any NI in relation to your self-employment (class 2 or class 4).

Do you have an accountant who prepares your tax return and ensures that all your income from both self-employment and employed income goes on the tax return? (as whilst you may not earn much from self employment the tax you pay should be based on all income so if you pay tax on your earned income you need to ensure you have not claimed your personal allowance twice), do you know what tax code you are on in your employment?

You really need to provide more details and make sure you understand what they have charged you for so you can check its correct. But you should be able to arrange a repayment plan with HMRC, although this would be classed as a priority debt, so in theory should take priority over your IVA debts. Obviously you don't want the IVA to fail but hopefully you can come to a workable agreement with HMRC.

DVardysShadow

Do you actually owe it, or is it a voluntary option to pay?

If you have to pay it, then I suggest that you should update your SoA with Payplan once you find out your options for paying this. But whether that can be done, I am not sure.

legoman

Excellent respones from above. I will look into it more detail and post up the info. I am just a bit panicky from the letter and wanted to get the ball rolloing.

Lottebear

This happend to me, it was because I has been made redundant and my new employer, hadn't entered my NI number correctly. I would suggest that you check your payslips, they gave me the option to buy extra over about 5 years, in the end I didn't need to once I had supplied the information.

legoman

Lottebear wrote: »

This happend to me, it was because I has been made redundant and my new employer, hadn't entered my NI number correctly. I would suggest that you check your payslips, they gave me the option to buy extra over about 5 years, in the end I didn't need to once I had supplied the information.

Hi there, sorry I don't quite understand the "they gave me the option to buy extra over about 5 years, in the end I didn't need to once I had supplied the information." part...

Tixy

Basically if you don't have to pay NI you can still voluntarily pay it (as it gives right to certain benefits, state pension etc).

So if you don't need pay they may periodically send out a letter giving you an option to pay for any missing years where you did not have NI (backdated up to 5years).

It sounds like in Lotte's case (and I could be wrong- sorry Lotte if I am:o) somehow her NI record was incorrect and they thought she hadn't paid them when in fact she had.

dancingfairy

For people that haven't got a full years national insurance contributions - low income, out of work etc they give you the option to top up your national insurance payments - this is becuase in order to qualify for a pension you need to have x number of years of full national insurance contributions. It is optional in this case because - it's up to you to make sure you have enough years to get the full pension when you retire.

In your case though it seems to be a case of you have not paid the compulsory national insurance contributions (because you are self employed and employed) and are expected to pay up. The confusion could be cased by neither job earning enough to pay NI contributions but between them both over the year they add up to more than the threshold.

You do need to check exactly what the letter says though as has already been suggested and maybe have a chat with the accountant.

df