SA return says £0 to pay but am sure I'm over NI2 threshold??

middlingditch

Hi all,
Newbie here so please be gentle. It's a National Insurance query and I can't find anything at all on HMRC website or by Googling.

Basically:
- I did my self-employed SA tax return for 2019-20 back in November, online
- Earned about £8000 self-employed income that year
- Outcome via online service was "nothing to pay" - £0. But the NI2 threshold for that year was £6395, I believe, so I should be liable for some NI contributions? 

I wrote a letter (in the actual post) to the National Insurance centre querying this immediately, ie mid-November, but have had no reply. (Kicking myself that I didn't send it by registered post.)

I've been doing SA tax returns for the last 10 years. My income is quite variable and in some previous years I did not earn enough to meet the NI2 threshold while in others I have - in fact one year I paid NI4s - and I don't remember this problem arising before.

The only potential complication this year is that I also delcared a very small amount of PAYE income - about £400 - and they've refunded me the tax I paid on that at the time, but I can't see why that would affect things in this way.

I'm worried I'm somehow not properly registered and/or that this will come back to bite me if I don't pay them by 31 Jan - but I can't see anywhere to even voluntarily pay the £150-odd I think I owe. 

Hoping I don't have to spend all this week on hold to the hotline... 

sheramber

Is £8000 your taxable profit rather than total income before expenses?

[Deleted User]

Strange! You didn’t tick the ‘Are you exempt from Class 2 NIC box by any chance?

Dazed_and_C0nfused

Have you actually registered as self employed with the National Insurance part of HMRC?

Jeremy535897

Dazed_and_C0nfused said:

Have you actually registered as self employed with the National Insurance part of HMRC?

It sounds as if this is the problem. See https://community.hmrc.gov.uk/knowledgebase/article/KA-01092/en-us

Dazed_and_C0nfused

Jeremy535897 said:

Dazed_and_C0nfused said:

Have you actually registered as self employed with the National Insurance part of HMRC?

It sounds as if this is the problem. See https://community.hmrc.gov.uk/knowledgebase/article/KA-01092/en-us

Interesting thanks

middlingditch

Dazed_and_C0nfused said:

Have you actually registered as self employed with the National Insurance part of HMRC?

I don't remember ever doing so as a separate thing, but bearing in mind I went self-employed in 2010 I don't really remember. I DO remember registering as self-employed with HMRC but it would have been back then.

middlingditch

Jeremy535897 said:

Dazed_and_C0nfused said:

Have you actually registered as self employed with the National Insurance part of HMRC?

It sounds as if this is the problem. See [link cut]

Thanks - really helpful. And alarming. Sounds as if I should fill in this form now, then, even though I have been self-employed continuously since 2010...?! Why didn't I know about this? 

I think I'd better ring the helpline first maybe. I struggle with the telephone but I think this is a needs-must situation.

middlingditch

sheramber said:

Is £8000 your taxable profit rather than total income before expenses?

Yeah it's the taxable profit. (My expenses are very little in any case so the figure is very similar.)

Dazed_and_C0nfused

A better first step might be to check your State Pension forecast on gov.uk so you have an understanding of exactly where you stand before rushing into anything.

You can check your NI history at the same time.

When looking at your State Pension forecast it is important you read past the likely headline of £175.20.  

You are under transitional rules so 35 years of NI isn't what matters.

Jeremy535897

Dazed_and_C0nfused said:

A better first step might be to check your State Pension forecast on gov.uk so you have an understanding of exactly where you stand before rushing into anything.

You can check your NI history at the same time.

When looking at your State Pension forecast it is important you read past the likely headline of £175.20.  

You are under transitional rules so 35 years of NI isn't what matters.

I would agree, but you also have to remember that OP is not talking about voluntary class 2 NIC here, but compulsory class 2 NIC, so the pension forecast is a bit of a red herring.

I think the problem arose when class 2 NIC ceased to be collected by direct debit and was transferred to self assessment. Not everybody was automatically made liable for class 2 under self assessment. Since then, people have registered for self assessment without going through the process of registering for self employment, which has exacerbated the problem.