Anyone able to help me with a questions about NI contributions as a low earner?

c'est_moi

Hi - I have tried to do my own research, but this is still as clear as mud to me!

I work for an agency and pay tax and NI through PAYE. My work patterns are very erratic. Some times I work a full week, sometimes one day, sometimes I don't have work for weeks. One the weeks where I earn enough I pay NI, on the weeks when I only work one or two days I pay none.

By the end of this financial year I think I will have earned about £7K. Does this mean that this will count as a full year of paid up NI contributions as I will have earned about the lower threshold of £6200 (or thereabout!) I would think I will have actually only paid a couple of hundred in NI this year due to the several weeks of earning nothing.

Thanks in advance.

molerat

The 52 x LEL threshold (£6396) is only accumulated on pay packets above the LEL and only on amounts below the UEL so a weekly pay below £123 (and any amount above £967)  will not count towards that total.

c'est_moi

Thanks for the prompt reply. I was worried that might be the case. It is going to be a case of topping up the missing weeks at the end of the year then - so frustrating when the work is so very up and down in terms of hours.

c'est_moi

Can I be cheeky and ask another question? If I earn a little money as a self employed person this year is it possible to top up my missing weeks at the self employed class rate? In other words, do you know if I can 'mix and match' - pay some weeks through PAYE as employed, and the rest as voluntary payments as self employed?

Thanks again.

Dazed_and_C0nfused

c'est_moi said:

Can I be cheeky and ask another question? If I earn a little money as a self employed person this year is it possible to top up my missing weeks at the self employed class rate? In other words, do you know if I can 'mix and match' - pay some weeks through PAYE as employed, and the rest as voluntary payments as self employed?

Thanks again.

I think so yes.  You must be registered as self employed with HMRC and complete a Self Assessment but that then opens up the opportunity to pay voluntary Class 2 NI (assuming profits aren't high enough to require it to be paid).

Blue_Butterfly

I was in a similar situation of having irregular earnings in 2018 and 2019. The NI rules apply when you are paid, not the dates when you actually work. My agency had a system where the worker had to release each shift for payment, so that people could query if their hours were wrong. I was able to use that to optimise my NI. If I worked a few days in one week then none for a few weeks I would release one shift each week for payment, ensuring that what I released was over the LEL so I got an NI credit. I also received holiday hours and would take an amount just over the LEL in a week in which I would otherwise not be paid. In order to do this I divided the LEL by my hourly pay rate to work out how many hours I needed to qualify. I did the same with the Primary Threshold- the level where you start paying NI contributions. If I had a small shift below LEL I would release it with another one so it would still count towards my annual total.

Hope this helps