What NI code if I'm taking 2 Years out of work?

John_Chip

I'm going to take a couple of years out to work on some projects - which will not earn me money while I am working on them.


I am leaving a PAYE job


I have 33 years of NI contributions - I would need to top up the current year I am in so as not to lose the NI payments already made.


Which tax code do I go onto if I am out of work but not claiming any benefits?


Any other advice or issues to consider?


Thanks


John

Linton

The purpose of tax codes is to operate PAYE. If you arent being paid through PAYE tax codes are irrelevent.

Bimbly

Get onto the HMRC website and look at your NI record if you haven't already. You can also find out about voluntary contributions there.

When I looked at mine I discovered that years when I only worked during the summer break from. University I earned a full year of contributions. You may find you already have a full year credit if you stop work part way through a financial year.

Will you be going back to work after these two years? You only have two more years to pay NI before you have full qualifying years. If you are going back to work for two years then you will automatically achieve full 35 qualifying years without paying extra.

If you end up not going back to work (ie, you plan to, but it doesn't happen), I believe you will be able to top up for those 2 extra years at no later than six years after the event. So, again, it might be better to save your money now and see where you are at the end of the two years.

You can and should check all of the above with HMRC. If the website confuses you, they seem to be much quicker at answering the phone these days (although end of Jan is tax return deadline, so may be not so much this month).

John_Chip

Thanks


Yes - I just want to know really what I have to have covered in respect of HMRC and NI contributions if I'm going to be economically dormant / out of the system for one, two years.


Would HMRC ask me to do a return at some point?


Thanks again -


John

Tom99

[FONT=Verdana, sans-serif]You need a pension forecast before you decide whether to pay voluntary NI for the next 2 years. It will also depend on your age and whether you will be doing any further paid work before you retire.

[/FONT] [FONT=Verdana, sans-serif]You don't lose any of the 33 year you have pay so far, but if any of these years have been contracted out then you won't be entitled to 33/35ths of a full pension but some lower figure.

[/FONT] [FONT=Verdana, sans-serif]https://www.gov.uk/check-state-pension[/FONT]

Linton

HMRC may or may not ask you to do a return. They will know that you have stopped paying taxes and so could take an interest in what you are doing. You will probably be due a tax refund from your employment this year, see here for getting a refund.

For voluntary NI see here. As you are so close to 35 years NI it may well not be worthwhile paying any voluntary NI at the moment. You can decide to pay for the missing years later. If you havent done so it is worth getting a State Pension estimate - see here. You may be further or nearer getting the full new SP than you think.

molerat

Bimbly wrote: »

You only have two more years to pay NI before you have full qualifying years. If you are going back to work for two years then you will automatically achieve full 35 qualifying years without paying extra.

35 years is of no real relevance for those with a pre 2016 NI history, especially if contracted out, and is only of any consequence when deciding whether filling pre 2016 gaps is worth it.