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Reclaim NI

edited 30 November -1 at 1:00AM in Cutting Tax
14 replies 1K views
Tiggy748Tiggy748 Forumite
15 posts
edited 30 November -1 at 1:00AM in Cutting Tax
Last tax year (18/19) I registered as self employed.
I was also employed. The self employment made a loss so I have reclaimed my tax but have overpaid NI by 1200 through my employment based on overall earnings.

How do I reclaim the NI? And as I'm expecting another loss this year, how do I prevent my employer overpaying going forward?
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Replies

  • BoGoFBoGoF Forumite
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    You don't because you can't
  • Caz3121Caz3121 Forumite
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    NI is worked on pay periods and not full year like tax. From you employed income you would be paying 12% on your income if it is between £719 to £4,167 a month
    have you been paying class 2 and 4 on your self employed income as well as the NI from your employment? (is that why you think you have overpaid?)
  • Tiggy748Tiggy748 Forumite
    15 posts
    I've overpaid as they based my contributions on my employed earnings of 20k, when I only earnt 8k overall
  • Tiggy748Tiggy748 Forumite
    15 posts
    I've only paid NI through employment as I knew I'd make a loss.

    So if I can't reclaim how do I stop it from happening next year, if the same situation arrises?
  • edited 16 May 2019 at 7:59PM
    moleratmolerat Forumite
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    edited 16 May 2019 at 7:59PM
    Tiggy748 wrote: »
    I've only paid NI through employment as I knew I'd make a loss.

    So if I can't reclaim how do I stop it from happening next year, if the same situation arrises?
    You have not overpaid, your contributions were correctly based on each pay packet. If you earn enough in employment you pay NI. The only way not to pay NI is to earn under £166 per week / £719 per month. Your SE losses are of no relevance to your employed pay as far as NI is concerned.
  • agrinnallagrinnall PPR
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    If your business has made a £12,000 loss, and may have similar losses this year, shouldn't you be considering giving up self employment? And if you do decide to continue then you should make an effort to educate yourself on how tax and NI work so that you don't end up in a financial mess.
  • PennywisePennywise Forumite
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    You get NIC relief against self employment losses against future profits.

    So, if next year, you make a s/e profit of £30,000, you can bring forward and set off the £12,000 s/e loss and only pay NIC on the balance of £18,000 s/e profit. But as you've already used the £12,000 loss for income tax against employment income, you'd pay income tax on £30,000 s/e profit next year.

    Loss relief for tax and NIC works in different ways - they're completely different. You have different profit/loss "streams" to deal with losses. For NIC, losses can only ever be set against future profits of the same trade, not sideways or backwards like they can be used for income tax.
  • Tiggy748Tiggy748 Forumite
    15 posts
    Try not to judge in future please. My losses have been based on training and setting up a UK wide research project that will save lives. This is envloves expenditure which came from my own pocket not a bank with a potential 800k plus income in a few years. Quite frankly if you can't understand how a business can make a 10k loss for 2 years and see that as reason to give up its perhaps a good idea not to comment on self employed threads.
  • uknickuknick Forumite
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    If you are expecting income of over £800k in a few years, which I assume will be over a few years based on what what you just posted, will you be setting up a Ltd company to be more tax efficient?
  • BoGoFBoGoF Forumite
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    Tiggy748 wrote: »
    Try not to judge in future please. My losses have been based on training and setting up a UK wide research project that will save lives. This is envloves expenditure which came from my own pocket not a bank with a potential 800k plus income in a few years. Quite frankly if you can't understand how a business can make a 10k loss for 2 years and see that as reason to give up its perhaps a good idea not to comment on self employed threads.

    Your assumption that you would get a refund of employee NIC would suggest your understanding of tax is not as great as you think it is.....which leads me to question whether all yoir expenditure is allowable.
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