Class 2 contributions refund - possible?

ManicMum

Hello

I am confused. I think I have been paying class 2 unnecessarily. I am self-employed but on low income (don't pay tax). I was paying class 2 but recently found out that I don't need to pay at moment as I have no clients. I was told (at job centre) that I am covered anyway (HRP) as I have children under 12.

I did know about the small earnings exception certificate but was under impression paying class 2 would be more beneficial. Has this been a total waste of money for me? If so, can I get a refund and for how far back?

many thanks

kst101

You have to do it quickly - if it was in the last tax year ie 10-11 you will be OK but as I found out if it is left any longer you can't. Think you have until 31 January 2012 to apply. Am just going to get children from school but will try and find where I got the information from later on.

Mojisola

As you are self-employed, I don't think you can claim HRP -

https://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Caringforsomeone/DG_10018691
Who wasn't eligible
In the following circumstances you would not usually have got HRP.

Married women or widows
If you were a married woman or a widow, you couldn't get Home Responsibilities Protection for any complete tax year if:
you held a Married Woman’s Reduced Rate Election which was in force for that tax year
you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp)
you had chosen not to pay Class 2 National Insurance contributions when self-employed

stazi

Paying Class 2 NIC at about £2.50ish pw is never a waste of money. HRP only covers you for State Pension (SP), whereas Class 2 NIC also covers you for ESA, MA, BB as well SP.

ManicMum

stazi wrote: »

Paying Class 2 NIC at about £2.50ish pw is never a waste of money. HRP only covers you for State Pension (SP), whereas Class 2 NIC also covers you for ESA, MA, BB as well SP.

Thanks. Not sure what BB or SP is? I am not planning on having any more children so no need for MA. I can't claim any ESA as my husband works, so not sure what I get out of it?

Also, if I don't pay when I am out of work, am I still getting my HRP? It is very confusing and even when you ring people up, you are left dazed and confused.

ManicMum

Mojisola wrote: »

As you are self-employed, I don't think you can claim HRP -

https://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Caringforsomeone/DG_10018691
Who wasn't eligible
In the following circumstances you would not usually have got HRP.

Married women or widows
If you were a married woman or a widow, you couldn't get Home Responsibilities Protection for any complete tax year if:
you held a Married Woman’s Reduced Rate Election which was in force for that tax year
you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp)
you had chosen not to pay Class 2 National Insurance contributions when self-employed

thanks. that is worth considering. Puzzled as to what being a married woman has to do with it? What if I was just living with partner? What's the difference?

Mojisola

ManicMum wrote: »

Also, if I don't pay when I am out of work, am I still getting my HRP? It is very confusing and even when you ring people up, you are left dazed and confused.

As I understand it - but willing to be corrected - the HRP worked on a full tax year basis, not week by week, so if you paid a stamp for part of the year, you didn't get HRP for the other weeks.

ManicMum wrote: »

thanks. that is worth considering. Puzzled as to what being a married woman has to do with it? What if I was just living with partner? What's the difference?

I don't know. Being a parent claiming CB should be the relevant bit rather than marital status.

Becles

ManicMum wrote: »

I can't claim any ESA as my husband works, so not sure what I get out of it?

You can claim contribution based ESA if you are sick and or have an accident etc., and can't work. It's based on your contributions and not on household income.

I'm married and my husband works. I'm self employed and paying Class 2, and I've recently claimed it as I had to have an operation which required time off work.

£2.50 a week is worth it for peace of mind IMO.