Class 2 NI not being Axed at April 2019

lisboa84

I applied to pay class 2 after I left the UK in 2006 and they didn't say that I have to pay class 1 for the first year.
I have to pay class 3 for the time I spent looking for employment abroad, but as soon as I secured employment, the rates dropped to class 2.
So for 2006/2007 tax year, I have a mix of class 2 and class 3 to pay to purchase that tax-year, but no class 1.

jahwobble

lisboa84 wrote: »

I applied to pay class 2 after I left the UK in 2006 and they didn't say that I have to pay class 1 for the first year.
I have to pay class 3 for the time I spent looking for employment abroad, but as soon as I secured employment, the rates dropped to class 2.
So for 2006/2007 tax year, I have a mix of class 2 and class 3 to pay to purchase that tax-year, but no class 1.

Hi are you paying your contributions by internet banking from a non-UK bank account? What codes, bank details do you use?

lisboa84

jahwobble wrote: »

Hi are you paying your contributions by internet banking from a non-UK bank account? What codes, bank details do you use?

No, I've transferred money from my foreign account to my UK account, so that I don't have to worry about overpaying/underpaying due to the exchange rates.

I haven't actually paid my contributions yet; I just can't decide whether to pay before the April 2019 deadline or the April 2023 deadline

All the bank details are here (make sure to copy and paste the bank account numbers so that you don't accidentally type an incorrect digit!). https://www.gov.uk/pay-class-2-national-insurance/bank-details

dave_ave

Johnnyboy11 wrote: »

Good for working age expats too.

Yes, sure is!

POPPYOSCAR

MoneySaving_ExNOT wrote: »

This is just to save me some time - I'd be very grateful for some help:
The last couple of times I rang HMRC I spent forever in a queue so, before I spend an hour on the phone please, please could I ask you MSE experts a quickie regarding class 2 NI contributions:

Question: How do I actually go about making a payment?
I completed a tax return showing a small profit and wish to make a class 2 NI contribution for the year to April 2018.
I just checked my (NI) State Pension Summary and it shows a gap (Year is Not Full), but says I should make a payment of £700 odd.
Do I just make a payment of Class 2 NI (£2.95 * 52) £153.40 by bank transfer and put the tax reference number I was given when I submitted my tax return?

Is it that simple, or do I have to phone them and ask them to 'bill me' - so to speak.


Thank you in anticipation

When you filled out your tax return one of the questions would have asked you if you wanted to make a voluntary class 2 NI contribution if your self-employed earnings meant you were exempt from paying.

If you ticked that box it would have told you how much you had to pay. You could then pay this online or print out the form to send in with your payment.

MoneySaving_ExNOT

Thanks for the reply Poppyoscar

I think part of the problem timing on my part. Although I had sent in my tax return months ago, when I went online to view / alter my tax return (if necessary) after the 31 January cut off date - I could not access my tax return.....
An additional difficulty was that I could not access my Government Gateway I received the message:

"Services on the Government Gateway are gradually being moved to replacement systems.
"For services that have not moved yet, the Government Gateway is still available. All services will move by March 2019"


But when I set up new log in procedures in Gov.uk Verify I managed to get in.
But to compound the problem the online National Insurance record said
"We are checking this year to see if it counts towards your pension. We’ll update your record when this is finished, you do not need to do anything." in respect of the 2017/8 tax year

Anyway I spent ages on the phone but managed to resolve the problem and make the payment direct (although I will still need to check the NI record to ensure that it has been correctly allocated in a couple of weeks time)

For interest the relevant direct phone numbers are
0300 200 3300 Tax Line (to confirm the Class 2 NI application was on record)
0300 200 3500 NI Line (to confirm the amount - £153.40)
0300 322 7823 C2 NI Payment Line (to actually make the payment by card)

Once again thanks for your help

POPPYOSCAR

MoneySaving_ExNOT wrote: »

Thanks for the reply Poppyoscar

I think part of the problem timing on my part. Although I had sent in my tax return months ago, when I went online to view / alter my tax return (if necessary) after the 31 January cut off date - I could not access my tax return.....
An additional difficulty was that I could not access my Government Gateway I received the message:

"Services on the Government Gateway are gradually being moved to replacement systems.
"For services that have not moved yet, the Government Gateway is still available. All services will move by March 2019"


But when I set up new log in procedures in Gov.uk Verify I managed to get in.
But to compound the problem the online National Insurance record said
"We are checking this year to see if it counts towards your pension. We’ll update your record when this is finished, you do not need to do anything." in respect of the 2017/8 tax year

Anyway I spent ages on the phone but managed to resolve the problem and make the payment direct (although I will still need to check the NI record to ensure that it has been correctly allocated in a couple of weeks time)

For interest the relevant direct phone numbers are
0300 200 3300 Tax Line (to confirm the Class 2 NI application was on record)
0300 200 3500 NI Line (to confirm the amount - £153.40)
0300 322 7823 C2 NI Payment Line (to actually make the payment by card)

Once again thanks for your help

I have been advised it can take up to 6 months to update.

MoneySaving_ExNOT

POPPYOSCAR wrote: »

I have been advised it can take up to 6 months to update.

I wouldn't be surprised ...... mind you the payment of Class 2 NI went out of my account the same day

An aside I know, but the State (Government Gateway, NI rules etc) keeps moving the goalposts.
I'm in my early 50's and sometimes I get confused by the rules. I just want to ensure I build up entitlement to the pension when I am still capable of interacting with ever changing computer systems etc (and not have to rely on call centres).
So in that sense it's good to get a regular check of NI based pension entitlements, if I keep checking I'll hopefully keep on top of things.

For those of us who are getting on towards retirement it's a good discipline to take action NOW and not leave it until we have been left behind.....


Once again thanks. And indeed thanks to all MSE forum posters - it's great to have a discussion for finance. It was through this site that I first heard about the Class 2 NI option AND the pension tax relief for non-taxpayers ie £2880 plus £720 relief becomes £3600.

kilroy_murdoch

OK so I found this rather confusing myself but have gradually got it all sorted so am happy to share with you all the process that I went through (some of it repeats information already shared but figured it was good to give end-to-end process).

Naturally upon moving abroad - being the relatively normal person I am - I didn't think too much of what to do about my tax affairs (Aside from de-register from HMRC for income tax purposes).
Eventually a couple of years later I decided to dig into it and got my government gateway password and checked the gaps in my record. There were a number of years missing (have previously worked abroad too) and all were basically categorised as awaiting class 3 contributions of circa 750 per year.
After digging through some of the information in the online portal I realised as I was working abroad I was entiteld to class 2. The first thing I did was basically to fill in and send off NI38 and set up the direct debit.

HMRC generally takes 2-4 months to process any letters and they don't really inform you much of what's going on but you can check 'your progress' in the online portal to see whether they're working on your communication.
I got a letter back and all was sort of set-up but I still had NIC arrears. Basically after this I ended up sending a letter typed up myself attaching my employment contracts from each period where there was a gap asking for a reclassification, and they then indeed sent me a letter back re-classifying me as being eligible to pay class 2 contrbutions, with the new amounts that were circa 150 a year. The information regarding payment was slim in the physical letter they sent but indeed I went to the portal and found details for bank transfer. I found this a little strange (given there was no specific link to your account aside from using your NI number as a reference) and ust took a gabmble and made a payment of what I calculated to be the correct amount.
It took a while and a couple of phone calls to clarify they had received my payment but eventually all is sorted and now I have full contributions and a direct debit moving forward.

Finally, on the expat thing - it is a pretty good deal though there are limits to the entitlement we get i.e. to my understanding its pension only and no other benefit entitlement at all. I'm not an expat making much money (charity sector) and was mainly concerned about falling through the cracks and ending up without a state pension! Glad they'e cancelled a switch to class 4 for now but not sure what changes they do have up their sleeve. As such I figured it was good to move fast, get gaps covered and get the direct debit set up at the class 2 rate.
Hope this helps!

bostonerimus

kilroy_murdoch wrote: »

Finally, on the expat thing - it is a pretty good deal though there are limits to the entitlement we get i.e. to my understanding its pension only and no other benefit entitlement at all. I'm not an expat making much money (charity sector) and was mainly concerned about falling through the cracks and ending up without a state pension! Glad they'e cancelled a switch to class 4 for now but not sure what changes they do have up their sleeve. As such I figured it was good to move fast, get gaps covered and get the direct debit set up at the class 2 rate.
Hope this helps!

At the Class 2 or even Class 3 NI rate the current flat rate pension is a very good deal. I'm at 35 years of contributions, mostly at Class 2, and it's a nice feeling to know that I'll get the full SP when I turn 67...if they don't change the rules on me. Of course that's the risk in all this, you have to trust that you'll get the benefit, but if you are paying Class 2 it's an inexpensive risk and I'd say the risk is pretty low. Also make sure you understand any local state and private pensions you are paying in to as well as your UK benefits.