National Insurance Query please can anyone help

katies_mum

Hi, not sure if I have posted this in the right place, was wondering if anyone can please help?

I am self employed and have been for 20+ years and use self assessment. Earlier this year I did some exam invigilating, it was over 3 months April/May/June but it was paid as one lump sum at the end of the work.

I didn`t think I would have to pay NIC `s until all my earnings were put on my self assessment tax return (For the past 2 years have paid voluntary class 2 as I have not earned very much). I queried it with the school who checked with the company who does their pay and they set me the details below. From what I can understand is they seem to think that I earn £847.37 monthly

Please would anyone know if this is correct and if so how will it affect my self assessment. Maybe next time I would be better submitting time sheets each month. Thank you so much

"The total you can earn before you pay Ni is £702, gross pay in August was £847.37, the additional £145.37 attracts National Insurance @12%, see extract from HMRC below;

Period of pay monthly
Gross pay this period £847.37
NIC`s cat letter A


Lower earnings limit £503
Earnings above the lower earning limit and up to
And including the primary threshold £199
Earnings above primary threshold up to and
Including upper earnings limit £143.37

Employers NIC due £20.06
Employee`s NIC`s due £17.44

Total NIC`s due £37.50

sheramber

That sounds like you are an employee for that job and have been paid under PAYE with NiC being correctly deducted from your month's wage.

You will need to complete 'employment' pages in your self assessment tax return for this income as well as self employed pages for your self employment

antrobus

Seconded, your exam invigilating was an employment. You will receive a P60 in due course. You enter those details in the employment section of your SA return.

katies_mum

Thank you both, I will have to check as was under the impression it was still self employed. Most probably a very daft question, but will I get the National Insurance I have paid back or will an adjustment be made in what I pay this tax year? Thanks again for your help

Pennywise

katies_mum wrote: »

will I get the National Insurance I have paid back or will an adjustment be made in what I pay this tax year?

Probably not. NIC is on a "per job" basis. Only if you pay more than the maximum in a year will there be any repayment claim. Because you've paid it via employment, the amount earned won't get included in your self employment income so you won't pay s/e NIC on it. So, basically you've paid employed NIC on it instead of self employed NIC.

chrisbur

katies_mum wrote: »

Hi, not sure if I have posted this in the right place, was wondering if anyone can please help?

I am self employed and have been for 20+ years and use self assessment. Earlier this year I did some exam invigilating, it was over 3 months April/May/June but it was paid as one lump sum at the end of the work.

I didn`t think I would have to pay NIC `s until all my earnings were put on my self assessment tax return (For the past 2 years have paid voluntary class 2 as I have not earned very much). I queried it with the school who checked with the company who does their pay and they set me the details below. From what I can understand is they seem to think that I earn £847.37 monthly

Please would anyone know if this is correct and if so how will it affect my self assessment. Maybe next time I would be better submitting time sheets each month. Thank you so much

"The total you can earn before you pay Ni is £702, gross pay in August was £847.37, the additional £145.37 attracts National Insurance @12%, see extract from HMRC below;

Period of pay monthly
Gross pay this period £847.37
NIC`s cat letter A


Lower earnings limit £503
Earnings above the lower earning limit and up to
And including the primary threshold £199
Earnings above primary threshold up to and
Including upper earnings limit £143.37

Employers NIC due £20.06
Employee`s NIC`s due £17.44

Total NIC`s due £37.50

As advised you will not get an automatic refund for this. However I certainly feel that you have been charged NI that you should not have paid.
You have been charged on the basis that as you were paid in August your pay period was one month, and I believe that you have a very good case to dispute this.
If you refer your employer to the CWG2 instructions for earnings periods at....
https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2017-to-2018-employer-further-guide-to-paye-and-nics
Section 1.7 gives details of the earnings period to be used....

This payment could be considered as quarterly in which case it should have been divided by 3 any NI due on that figure (in this case zero) is then multiplied by 3.
Result zero.

If it was considered as irregular then the pay interval is the period covered by the payment so same as above quarterly.

If it was considered as a once only payment then the payment interval is the length of the employment or one week whichever is longer so same as above.

If the employer considers this as a late payment for a new starter then section 3.1.5 would apply and as it covers 3 months each separate month should have NI calculated on it and the 3 totals then added together, again zero.

If the employer considers that these were payment not made on their usual day then section 3.2 would apply. This is basically the same as 3.1.5 result zero.

If the NI thresholds required for the various pay intervals they can be seen here on page 20
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/674439/NI_Guidance__Software_Developers_2018_to_2019__Jan18.pdf

Link not working so google "NI Guidance for software developers for 2018 to 2019"
The pdf is about 5 down titled NI Guidance for software developers for 2018 to 2019

katies_mum

Wow, thank you so much

molerat

Agree with chrisbur. My granddaughter did a paid internship with the council which covered 6 weeks. She was paid in one payment on the normal council monthly pay date which was well over the one month NI limit but no NI was deducted due to the correct calculation of the pay period.

katies_mum

Thank you all so much for your really helpful replies, its much appreciated

00ec25

bit late now but the role of an exam invigilator is considered to be an employee role, not self employment

https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm4152

katies_mum

I have emailed the company who do the pay for the school, will let you know what they say. Thank you again chrisbur for all your help.