Can National Insurance tax be reclaimed?

GA7_2

Comes up as 'NI EE's' on my pay slip. My annual income of the last tax year was within my personal allowance, and NOT above. I phoned HMRC but they told me they don't deal with NI tax. Is it possible to reclaim this tax or not?

McKneff

No, national insurance contributions are not linked to your personal tax allowance.

(they are not a tax)

If you earn £146 or over per week then you pay 12% of the amount betwen that and your salary and are not refundabl under normal circumstances.

Meadows

National Insurance - the basics

You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension. The contributions you pay depend on how much you earn and whether you're employed or self-employed. You stop paying National Insurance contributions when you reach State Pension age.

Who pays National Insurance?

You pay National Insurance contributions if you're an employee or self-employed and you're aged 16 and over, as long as your earnings are more than a certain level. If you're employed you stop paying National Insurance contributions as soon as you reach State Pension age. If you are self-employed, you stop paying Class 2 contributions as soon as you reach State Pension age and Class 4 contributions from the start of the tax year after the one in which you reach State Pension age.
State Pension age is 65 for men born before 6 December 1953 and 60 for women born before 6 April 1950. State Pension age for women born on or after 6 April 1950 is gradually increasing and will reach 65 in November 2018. From December 2018, State Pension age for women and men will gradually increase from 65 and reach 66 by October 2020.



Some people also pay voluntary National Insurance contributions. For example, you might choose to pay them if you:

• aren't working and are not claiming state benefits
• haven't paid enough National Insurance contributions in a year to count for the State Pension or other long term state benefits
• live abroad and want to maintain your state benefits entitlement

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/NationalInsurance/IntroductiontoNationalInsurance/DG_190048

NI is not a tax, you earn over a certain amount, you pay NI, goes towards your pension.
Your entitlement to many state benefits depends on your National Insurance contribution record (see the section below 'State benefits that depend on National Insurance contributions').
State benefits that depend on National Insurance contributions


Your entitlement to certain state benefits and the amount you can get depends on your National Insurance contributions record. In some cases it depends on your spouse or civil partner's contributions. These benefits include:

• State Pension
• contribution-based Jobseeker's Allowance
• Bereavement Allowance
• contribution-based Employment and Support Allowance

You can find a full list of the state benefits that depend on your contributions in the article 'National Insurance and state benefits'.

State benefits linked to your National Insurance contributions

State benefits that are linked to your National Insurance contributions are known as 'contributory benefits'.
The contributory benefits


National Insurance contributions count towards the following state benefits:

• the basic State Pension
• the additional State Pension, sometimes called the State Second Pension
• Jobseeker's Allowance - the 'contribution-based' element
• Employment and Support Allowance - the 'contribution-based' element
• Maternity Allowance
• bereavement benefits - Bereavement Allowance, Bereavement Payment and Widowed Parent's Allowance
• Incapacity Benefit

grey_gym_sock

GA7 wrote: »

I phoned HMRC but they told me they don't deal with NI tax.

fascinating ... so why have i been paying NI to HMRC under self-assessment?

McKneff wrote: »

If you earn £146 or over per week then you pay 12% of all of your salary and are not refundabl under normal circumstances.

you only pay 12% on the the part of your salary over £146, not on the whole thing.

that's for this tax year; last year, it was over £139.

that is if you're paid weekly. NI is calculated on the same basis that you're paid, so monthly if you're paid monthly. last year it was 12% on income over £602 each month.

NI is a weekly/monthly/whatever tax, so your total earnings during the tax year aren't relevant. you could earn a steady £602 every month and pay nothing; but if you earned sometimes under £602, sometimes over, with the same total earnings in the year, you would pay in some months.

they don't call NI a tax, but in reality it is, because it is compulsory (except for voluntary NI contributions), and because the benefits you receive for paying it bear no relation to the NI paid. there is no NI fund, into which NI contributions are paid, and out of which benefits are paid. it is all part of general government taxation and expenditure.

McKneff

grey_gym_sock wrote: »

fascinating ... so why have i been paying NI to HMRC under self-assessment?



you only pay 12% on the the part of your salary over £146, not on the whole thing.

that's for this tax year; last year, it was over £139.

that is if you're paid weekly. NI is calculated on the same basis that you're paid, so monthly if you're paid monthly. last year it was 12% on income over £602 each month.

NI is a weekly/monthly/whatever tax, so your total earnings during the tax year aren't relevant. you could earn a steady £602 every month and pay nothing; but if you earned sometimes under £602, sometimes over, with the same total earnings in the year, you would pay in some months.

they don't call NI a tax, but in reality it is, because it is compulsory (except for voluntary NI contributions), and because the benefits you receive for paying it bear no relation to the NI paid. there is no NI fund, into which NI contributions are paid, and out of which benefits are paid. it is all part of general government taxation and expenditure.

My apologies, you are right of course about the £146 and 12% between that and actual salary. I have edited my post in case someone sees the original in future and takes it as read.
Thanks for the clarification.