[Self assessment] Tax relief on spouse's class 3 Voluntary NIC

biniosuaf

Hello MSE Forum!

I wondered if and how I could get tax relief through my Self Assessment for the payments I've made to my wife's Class 3 Voluntary National Insurance contributions?

My wife is unemployed and not claiming any benefits. Our situation allows me to pay her contributions, but I questioned myself whether this part of my income has to be taxed if the money goes back to the government.

I've also seen in the other place, relatively similar case in which I can claim tax relief on maintenance payments to an ex-spouse. I'd be surprised if it's not doable.

Any advice or commentary is appreciated!

nick74

There is no tax relief available on NI contributions. An alternative might be for her to start a small business and pay Class 2 contributions, which are cheaper than Class 3.

Dazed_and_C0nfused

You could see if your wife wants to start a small business.

That would allow her the option, providing she registered with HMRC and completed Self Assessment returns (even if just showing low turnover and no tax/NIC to pay, of paying voluntary Class 2 National Insurance at c£160/year rather than you paying c£800/year.

And no, you cannot get relief on the NIC you have paid for your wife.

Not many qualify for Maintenance relief now either and as you have opened a LISA I think the chances of you qualifying are close to nil.

[Deleted User]

https://www.gov.uk/income-tax-reliefs/maintenance-payments-tax-relief

Not many at all!

185QueensRoad

nick74 said:

There is no tax relief available on NI contributions. An alternative might be for her to start a small business and pay Class 2 contributions, which are cheaper than Class 3.

The replies above are very useful for me as I look at my own situation, and I'm wondering if anyone can clarify if the starting a small business solution would work for me?

I've taken early retirement at 61 and I'm receiving my local government pension. Despite having a full employment record and 40+ years of NI contributions, the Future Pensions Centre at HMRC advise I will need to make a further 3 years of contributions to avoid losing some £20 per week of my state pension when I claim it at 66 (I have made suffficent contributions for the current year before retiring). If I start a small business so I can pay Class 2 contributions work for me, noting that I will have income from my workplace pension?

Any comments or suggestions will be a great help and much appreciated

Dazed_and_C0nfused

Yes, you have to register with HMRC and must complete a Self Assessment return each year you are running your own business and wish to pay voluntary Class 2 National Insurance.

You might want to read up on the "trading allowance" and look at the self assessment returns available on gov.uk to see what is involved as far as the form filling is concerned.

NB.  You won't be "losing" anything as it stands, you are a winner under the new system irrespective of future contributions.