National insurance credits for low earner with two jobs

gazza26

Hello there,


Are there any National insurance Experts out there that can help me, please?

Here's the problem: After carefully planning my state pension scenario when I gave up work to stay at home with the kids years ago, The Powers that be have since reduced the years for which you get a credit for national insurance for staying at home with the kids from 16 years to 12 years. So I am 4 years adrift for a full state pension. I now have elderly parents and do unpaid voluntary work, which I wish to continue.

I have been struggling to find information about my current situation to confirm if I am managing to add years to my national insurance credits for me to get a full pension. I wonder if there is anyone out there who can confirm, deny or point me the right direction.

I have a part time job for which I get about £112 a week (two 6 hour shift at £56 a shift), but I do two extra shifts per 4 week pay period to take my up to £560 every 4 weeks, which, I think should take me over the monthly threshold to get a Low earner National Insurance credit for the year, without paying any contributions or tax. Can anyone confirm I have got this right?

I have been offered some cash in hand work for a couple hours a week. Just a bit of cleaning for a friend, which I am very happy to declare as it still wouldn't take my income up to a level for which I would have to pay tax or national insurance. However it would increase my weekly income to over the £118 for a national insurance credit....but would it? As its paid by a second employer, and I guess would only come the Inland Revenue's attention when I file a tax return.

Added to that the cleaning, is only during term time, so does anyone know how many weeks/months of a year, you have to pay over the £118(week)/£512(month) threshold to get a full years credit for the national insurance.

An extra hour or so a week, cleaning locally, works far better for me and my family than two 6 hour shifts a month, a good drive away!

Also as I'm on the subject, I get paid, for the shift work, 4 weekly so effectively get 13 pay packets a year as apposed to 12 monthly ones. Would this have any bearing on the national insurance implications?

I would be most grateful for anyone's advise.

Many thanks to all

Paul_Herring

However it would increase my weekly income to over the £118 for a national insurance credit....but would it? As its paid by a second employer, and I guess would only come the Inland Revenue's attention when I file a tax return.

No. The national insurance limits are applied per-job in isolation of each other, per period - you cannot add income from more than one job in an attempt to get above the LEL in this fashion. Filing a tax return would not help in this regard either.

Also as I'm on the subject, I get paid, for the shift work, 4 weekly so effectively get 13 pay packets a year as apposed to 12 monthly ones.

That sounds like a simple £118×4=£472 limit (as opposed to the £512 limit), which you would appear to be getting from the shift work alone (£112×3+£560=£896) so you might be OK anyway - but that would suggest that you should be paying some NI anyway (the PT for 4 weeks would be £166×4=£664) and you give the impression that you're.. not?

ListenToTaxman suggests on that wage you should be paying around £27.84 NI per 4 weeks - are you?

Triumph13

The good news is that you should be okay with your current pattern of being paid £560 every 4 weeks as that slots in neatly between 4x the weekly LEL and 4x the weekly PT.
The bad news is that if you swap you extra shifts for your more local work then you drop below the LEL. On the bright side though you would be self employed for your cash in hand work and could therefore pay class 2 NICS which cost £3 a week. The real question therefore becomes is it worth £3 a week to be able to do your extra shifts locally rather than further away?

gazza26

Paul_Herring wrote: »

No. The national insurance limits are applied per-job in isolation of each other, per period - you cannot add income from more than one job in an attempt to get above the LEL in this fashion. Filing a tax return would not help in this regard either.

Thank you. That's cleared that up.


That sounds like a simple £118×4=£472 limit (as opposed to the £512 limit), which you would appear to be getting from the shift work alone (£112×3+£560=£896) so you might be OK anyway - but that would suggest that you should be paying some NI anyway (the PT for 4 weeks would be £166×4=£664) and you give the impression that you're.. not?

I do 10 shifts at £56 a shift per 4 week period, (2weeks at 2 shifts and 2 weeks of 3 shifts). The total I get paid per 4 weeks is £560.
I guess going by the 4 week process, I would do two weeks at £168, so £2 above the limited for national Insurance contributions and two weeks at £112 so below. As I am paid 4 weekly then the National insurance level for contributions to be paid would be (166x4=) £664 so I would on an average over the 4 weeks total, not reach this level.

I'm not sure how Inland Revenue would look at it? It is not broken down to a weekly basis on my payslip.

I am definitely not paying any National insurance contributions, no deductions are made on my payslip.

Do you think I should be paying? I don't want to end up with unexpected deduction and would rather get it sorted sooner rather than later.

I really appreciated you advise.

gazza26

Triumph13 wrote: »

The good news is that you should be okay with your current pattern of being paid £560 every 4 weeks as that slots in neatly between 4x the weekly LEL and 4x the weekly PT.
The bad news is that if you swap you extra shifts for your more local work then you drop below the LEL. On the bright side though you would be self employed for your cash in hand work and could therefore pay class 2 NICS which cost £3 a week. The real question therefore becomes is it worth £3 a week to be able to do your extra shifts locally rather than further away?

Thank you for that much appreciated.... I am going to investigate the self employed option as it might be better with the cost of petrol and time in the car etc.

Triumph13

I hope it all works out for you.
I think Paul_Herring just got confused about how much you earn - thinking it was three weeks at £112 and one week at £560 rather than 4 weeks adding up to £560 including the extra shifts.

Paul_Herring

thinking it was three weeks at £112 and one week at £560 rather than 4 weeks adding up to £560 including the extra shifts

Ah - indeed.

gazza26

Thank you guys that was really helpful


.... but I have another questions. So now that I know the NI earning level is lower for 4 weeks, (4x 118 = £472) and my original calculations were done on a monthly basis of £512. So I had to work 10 shifts to get over the £512. But if Inland Rev will treat my earning as a 4 week level, £472, I should be able to reduce the shifts to 9. (56x9=504). So do you think this would be safe to do, I'm not really sure how it all works in the big Inland Rev machine. But dropping a shift would help work all the other stuff in much better.

Also, how much of the year would you need to have these levels of work. I only started working in June, so I will have missed a couple of months contributions there.

Many thanks for your expertise in this area.

NedS

gazza26 wrote: »

Also, how much of the year would you need to have these levels of work. I only started working in June, so I will have missed a couple of months contributions there.

The annual LEL is £6136 per year (£118 x 52), so you would need annual NI assessable pay equal or above that level.

So if you are earning £560 for 10 shifts, you would need to have done that for 11 months to have earned £6160 in the year. As you started work in June, for this year to count you will need to ensure your earnings are above £6136.

gazza26

Thank you, I best start booking in some more shifts to catch up then!

Most grateful for your help.

drumtochty

There is an issue here.


I assume your employer pays you on a monthly basis as far as the tax man is concerned.


If so in one month per year you will have two payments and you will earn £1,120 in that one month.



You start paying NI after £719 a month.



Therefore in that one month you will pay £400 x 12% that is £48 in that month.


You may also tax that month based on £12,500 / 12 which is £1,040 and you would pay 20% of £80 which equates to £16. A total deduction os £64 that month.


You will be refunded the income tax the next month but the NI will not be refunded.