Tax and NI on 2 Jobs

Jeremy535897

molerat said:

Oops, yes, new for 22-23.  In my defence your honour I did consult the .gov page before posting https://www.gov.uk/self-employed-national-insurance-rates

With any luck this will see the phasing out of class 2 - increase class 4 to class 1 rates and make a single voluntary rate at class 3.

Given that would represent a payment of more than 5 times the current class 2 for those who are able to pay voluntary class 2 presently, I doubt the phrase "with any luck" is appropriate. It is one reason Hammond didn't proceed with the abolition of class 2 NIC.

molerat

When he did that the whole class 2 scenario was different. Now they have changed the compulsory class 2 threshold and the threshold at which you are credited without contributing there can be no justification whatsoever for voluntary class 2 contributions.  The only people now paying v class 2 are just gaming the system, why should some have to pay £15.85 and others £3.15 for the same benefit with no real differences in their circumstances.

Dazed_and_C0nfused

molerat said:

When he did that the whole class 2 scenario was different. Now they have changed the compulsory class 2 threshold and the threshold at which you are credited without contributing there can be no justification whatsoever for voluntary class 2 contributions.  The only people now paying v class 2 are just gaming the system.

Don't you still have to pay voluntary Class 2 if your profit is less than £6,785?

Although I guess a few people may happen to have larger profits this year 😃

molerat

Dazed_and_C0nfused said:

molerat said:

When he did that the whole class 2 scenario was different. Now they have changed the compulsory class 2 threshold and the threshold at which you are credited without contributing there can be no justification whatsoever for voluntary class 2 contributions.  The only people now paying v class 2 are just gaming the system.

Don't you still have to pay voluntary Class 2 if your profit is less than £6,785?

Although I guess a few people may happen to have larger profits this year 😃

But what is the difference between being self employed earning under the threshold and being employed earning under the threshold apart that one pays voluntary contributions at £3.15 and the other at £15.85 for the same benefit.  Now that self employed compulsory contributions and benefits have been more aligned with employed then VCs should follow.  The system now simply allows ex pats and 3 widgets a year ebay sellers to get their sp on the cheap.

Dazed_and_C0nfused

If seems odd but LITRG are saying it (Class 2 not Class 3) would be payable (if you want a qualifying year).

https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed#:~:text=Class 2 NIC are a,2022/23 tax year onwards.

molerat

Dazed_and_C0nfused said:

If seems odd but LITRG are saying it (Class 2 not Class 3) would be payable (if you want a qualifying year).

https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed#:~:text=Class 2 NIC are a,2022/23 tax year onwards.

Yes they can but IMO there is no justification for v class 2.

Jeremy535897

I agree the whole system is senseless. You can earn £120 a week and have to pay class 3. You can earn £130 a week and pay nothing. You can have profits under £6,715 and pay class 2, but over that you pay nothing until you have profits over £11,908. It is a bit of a hike to increase it five fold in one go though. I see no logic in crediting anyone with NI weeks because they earn between two different sums, but with the changes to pensions and benefits how long is it going to matter anyway?