Working part year and NI 'years'

madeinireland_2

Unfortunately further pension contributions are out of the question as I'm already slightly beyond the LTA.

I know it is taxed so I presume it is considered pay but yes it sounds like I will have to check with the company - just thought someone would know from past experience of it.

Cheers...

madeinireland_2

Just found out leaver payment is not subject to NI payments so I think it won't work and I will just have to settle for one extra year by virtue of working to end of April.

Anyone know how much each year costs to buy?

neilvw

madeinireland wrote: »

Just found out leaver payment is not subject to NI payments so I think it won't work and I will just have to settle for one extra year by virtue of working to end of April.

Anyone know how much each year costs to buy?

https://www.gov.uk/voluntary-national-insurance-contributions/rates

k6chris

xylophone wrote: »

http://www.taxguideforstudents.org.uk/going-abroad/national-insurance


A qualifying year sounds as though you might need to have a perfect 52 weeks of working for it to count. In fact, any tax year where you receive a minimum amount of earnings or credits (which you receive, for example, if you cannot work because you are bringing up children who are aged under 12) can be a qualifying year. The 2016/17 tax year could be ‘banked’ as a qualifying year provided you have earned the equivalent of 52 x £112 (this amount is known as the Lower Earnings Limit) – total £5,824. Please note that any pay periods in which you have earned under the Lower Earnings Limit will not count towards the total.

Depending on whether you are working at the same time as studying, you may already have a couple of qualifying years under your belt.

Does this LEL of £5,824 in any tax year apply to gross income, ie if I was earning a gross salary of £48k pa, ie gross £4k per month, then 1.5 months of work in the new tax year would tick the required box, even though my 'take home pay' was less than £5,824?

Thanks

neilvw

Wurly wrote: »

I hope OP doesn't mind me jumping in here as this is a question i have been wondering for a while.

I am going to end up working part of the tax year (2017-2018) retiring somewhere inbetween. I am maxing avc's to my pension, so will need a full years contributions reach the lower amount.
I also would like to add another qualifying year (or two) but also thought you needed a full years contribution over 52 weeks.
Is it possible to buy missing part years or pay up the shortfall?

I'm just wondering if it might pay me to stop the avc's before April or carry on?

I don't understand the AVC point, perhaps you could expand further?

You can make up part-years. Once the tax year is over (plus a few months) check your NI record at https://www.gov.uk/check-national-insurance-record and it will tell you how to top up, should you need to do so.

k6chris wrote: »

Does this LEL of £5,824 in any tax year apply to gross income, ie if I was earning a gross salary of £48k pa, ie gross £4k per month, then 1.5 months of work in the new tax year would tick the required box, even though my 'take home pay' was less than £5,824?

Yes, it's done on gross income.

zagfles

greenglide wrote: »

If earnings for a single employment in the year are greater than the NI lower earnings limit - £5,824 - then it is a qualifying year. It makes no difference whether this is in one week or 52 weeks.

This figure is below the primary threshold - £8,060 (£155 per week) - at which you actually pay NI so you can get a qualifying year without paying NI!

It does (or can) make a difference because any earnings above the UEL don't count nor does any pay period where you earn below the LEL.

So if you earn £5824 in one week it is not a qualifying year. See https://forums.moneysavingexpert.com/discussion/comment/71234294#Comment_71234294

Wurly

To Neilvw
Sorry, yes i can explain it a bit better.
By increasing my additional voluntary contributions to my pension i have managed to decrease my tax and NI contributions to the extent i am actually on minimum wage. If i were to increase it more the company would end up paying below that which they obviously cannot. Effectively my NI contributions reach Lower earnings limit to qualify me an additional year but it takes 52 weeks. Hence my decision to stop AVC's completely from April to achieve LEL with 2-3 months. But the way things are where i work, i'm ready to hit the ejector seat button in April, go self employed and pay class 2. (I'm looking into it, i think it's possible?)

System

zagfles wrote: »

So if you earn £5824 in one week it is not a qualifying year.

I think if you could contrive to be a company director then you can opt for earnings to be calculated annually for NI purposes.

t0rt0ise

One more question... when I look at my online state pension forecast, it says I will get x amount if I pay NI until April 2020. My pension age is November 2020 so it seems that I will still make contributions in that last year but the year will not count. Is that right or will it count presuming I earn enough?

jamesperrett

That's right - contributions in the year in which you qualify for your pension don't count towards it.