Question for FIL and NI contributions

kerrypn

Not sure if this is the right place to post, but its not really about cutting tax, its about national insurance contributions.

Basically my FIL retired around 5 years ago. He is Full time carer for MIL who gets higher rate DLA on both components. They receive pension credits and both FIL and MIL receive state pensions.

Around the time he retired, he started receiving letters from National Insurance saying to pay approx. £500 in NI. These were worded in such a way that it appeared to be optional, I think it said something like to increase his state pension. He has definitely sufficient qualifying years for the state pension.
The letters were approximately once a year, so it seemed like an optional top up.(I only found out today so dont bite my head off!)

However last week he received one demanding immediate payment or they would take court action. Now does he have to pay NIs since he is over pensionable age and in receipt of a state pension?

The only thing I can think of is for a couple of years prior to retirement he worked as a taxi driver, but he made a loss, (they ended up losing their home) but I still dont think this would account for this amount.

He cannot pay this, and is in pretty bad health himself, he is due to have both his hips replaced due to severe arthritis and is about to claim attendance allowance.

Can anyone advise on the situation please? Thanks

kerrypn

Anyone have any idea on this? Please?

Sorry to mither but he is really worried

[Deleted User]

it sounds like he didnt pay his class 2 ni cont whilst i assume he was self employed?

kerrypn

No I don't think he did-as I say he made a loss.

Would this account for £500 worth of Ni's for 2 years when he was self employed?

What happens now? Will he have to pay this or not?

Thanks for replying

Mojisola

Would he give you permission to phone them on his behalf so they can explain exactly what's happened and why they're claiming the money?

anmarj

Unless he applied for a small earnings exemption for not paying his class 2 while he was not earning enough, then he is still responsible for paying NI, do you know if he applied for it? Being self employed I did have details on start up from them stating that if my I thought my business I could not expect to earn over a certain amount, I could apply for an exemption from paying class 2, but if you did not apply then you are still responsible for paying NI contributions regardless of whether you make a profit or not.

kerrypn

I suspect he did not claim exemption-does this mean he will have to pay it? Will they take installments?

I could phone on his behalf-I help with their financial affairs in terms of form filling in etc but just wanted to know where he stood first really, he could really do without this at the moment

Thanks for replying

sleepless_saver

It would be a good idea to phone them and find out which years they think NI contributions should have been made for.

He can then write to HMRC explaining which of those years he made a loss for (or earned below the relevant threshhold - see below. He should ask them not to pursue as he would have been entitled to the NI small earnings exception for those years had he known to claim it. Also he should explain that he had misunderstood the letters and thought they were about voluntary contributions which is why he had not responded earlier.

He should also say when he retired and that he is now on a low income and in receipt of pension credit.

The threshhold for claiming the exception increases every year and is currently about £5600. This is for net earnings not turnover.

If he has accounts for those years, he should include copies of those with the letter.

kerrypn

Thank you sleepless that is really helpful, I am going to phone him and get all the details and ask him to pop up with all the paperwork.

Thanks to all who responded, much appreciated

sleepless_saver

Good luck, and let us know how you get on.

kerrypn

Thanks sleepless. I have now established this is for the period 2000-2006. Which part of it is unclear and the woman at the NI helpline seemed as bewildered as I am, but my FIL will come up with paperwork next week at some point and give me permission to officially deal with it.

I think this might be an admin error of some sort so hopefully it should be pretty simple(here's hoping eh?) to resolve.

Will post back with more news next week hopefully.

Thanks again.