Lower Earnigs Limit

cns06

Can anyone advise if the Lower Earnings Limit is the trigger for State Pension credits?
Or is it the Primary Threshold?
I have asked 2 accountnats and had 2 different answers?!
Thanks

molerat

LEL is the trigger for NI credits towards the SP.
PT is the trigger for paying class 1 NI.

Technically LEL is the trigger for deducting NI but at 0%.

cns06

So if I clear the LEL but fall under the PT I should still be getting state pension credit for that year?

molerat

Yes. If you don't reach the LEL each pay period but you earn 52 x the LEL in a year you should get a whole year credited.

xylophone

https://www.litrg.org.uk/tax-guides/employment/what-national-insurance-do-i-pay-employee

What happens if I earn less than the weekly/monthly threshold?
If you have earnings above the lower earnings limit (£116 per week or £503 per month for 2018/19) and below the primary threshold (£162 per week or £702 per month for 2018/19) you will not have to pay any Class 1 NIC. Your NIC record will be credited, however, as though you have paid Class 1 NIC. These are called NIC credits. These may earn you entitlement to contributory benefits and the state pension.

If you earn less than the lower earnings limit (£116 a week for 2018/19), you pay no Class 1 NIC and you do not get any NIC credits either.

You can read more about the impact that this can have on your entitlement to contributory benefits and the state pension, in our news piece looking at NIC records for low-paid employees.

Prism

Yes. The optimal pay for this year ending April is £8424. For next year its £8632. I pay myself those amounts each year and get state pension credits without paying NI

cns06

Thanks all. I have spoken to HMRC and although it took the best part of an hour on the phone and speaking to 6 different people I finally got the info I needed which is so long as my income was over the LEL (which it was) then I should get SP for those years.

I can do past year correction on real time system for 4 missing years, so that's good news. I just need to get my tax code for that year and then I can fill in the details from my SA302s (which I have for those 4 years).

The tricky bit is the 6 years prior to 2013. I will have to submit a paper P14 for each year. But before I can do that I will need to get an SA302 for each year. So a bit more legwork.

In theory I should get it sorted, might just take a while. The revenue have kindly ordered me 6 years worth of P35s so now just need to get onto the SA department and get the SA302s and I should be able to return all the paperwork.