clarification on n.i. contributions

COOLTRIKERCHICK

hi... i am going to turn my hobby into a small business..

mainly selling on ebay......its not going to take a fortune....prob.... after expenses etc it will be under the tax threshold.... but i dont want to be caught out and not declaring it to mr taxman...

with n.i. contributions..... am i right in remembering there are two rates for low earners ? voluntry contributions ?springs to mind.....

its mainly for my pension.... if there is going to be a pension when i reach retirement age lol......i'm the big 40 ( shhhhh dont tell anyone )

so basically is it worth paying the higher one.... or pay the basic and pay into a seperate pension scheme/fund

hope all that made sense..

thanks.....

windswept

if your earnings are going to be low at first, you can get a certificate of exeption from hmrc, that's what we have done, however, if your business will be your only income, you would be better paying your class 2 contributions, it's only £2 something a week and will cover you for sick pay etc. you only pay class 4 on higher earnings, a percentage of your profits, if you go on hmrc website it explains it all.

windswept

if your earnings are going to be low at first, you can get a certificate of exeption from hmrc, that's what we have done, however, if your business will be your only income, you would be better paying your class 2 contributions, it's only £2 something a week and will cover you for sick pay etc. you only pay class 4 on higher earnings, a percentage of your profits, if you go on hmrc website it explains it all.