Self Employment and Class 2 NI contributions

Marvqn1

I received a letter today from HM Revenue & Customs, which is a bill for Self-employed Class 2 National Insurance contributions.

As I earn only less than £5885 per year, I was thinking of applying for Small Earnings Exception so I don't need to pay Class 2 NICS.

It says that if you apply and receive a certificate of small earnings exception, you will not protect your entitlement to benefits and may reduce your future state pension.

Does this mean that I wouldn't even be able to claim a benefit such as housing benefit if I don't pay class 2 NICS or does it just mean I wouldn't be able to claim JSA and would have a reduced future state pension?

Norman_Castle

I believe housing benefit is based on income, not contributions.

Marvqn1

Norman_Castle wrote: »

I believe housing benefit is based on income, not contributions.

Thank you for the info.

If for example I applied for small earnings exception and didn't pay Class 2 NICS for 3 years, would I be given the option to top up my NI contributions in the future so I would be eligible to claim job seekers allowance or is it a case of that you can't claim JSA if you apply for small earnings exception.

Undervalued

As far as I'm aware Class II (self employed) contributions don't count towards JSA in any case.

I've no idea of your age or how many years you have worked but it is worth checking if you have enough years contributions for a full state pension (30 I think but don't quote me on this).

If you have not done so request a state pension forecast.