Class2 NI to get 2 years contribution for £164 PA with income under £1000 - is it really possible?

itsmeagain

Hi all. I'm 57 and my state pension shows that i'm currently around £10.50 per week short of £185 (because I retired at 55 with 39 years of pre & post 2016 contributions).

My daughter & wife run a pet care partnership where she occasionally gets reliable people to pet sit for her and pays them less than £1000 PA.

Now I've retired, my daughter has asked if i'd like to pet sit (when double booked, holidays etc) and wonders if I could pay voluntary class 2 NI at £3.15 per week under the less than £1000 income rules, thus achieving my 2 years NI shortfall 'on-the-cheap'.

Link to the gov table referencing the below £1000 income (scroll down one page) https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

My other income is £30k PA DB pension where i pay tax but no NI.

Is it permissible for me to earn £164 PA (as described above), pay it all in NI and get my final 2 years NI contributions on the cheap or have I lost the plot?

If possible, what are the admin steps required for me to deliver the plan?

Many thanks!

Dazed_and_C0nfused

itsmeagain said:

Hi all. I'm 57 and my state pension shows that i'm currently around £10.50 per week short of £185 (because I retired at 55 with 39 years of pre & post 2016 contributions).

My daughter & wife run a pet care partnership where she occasionally gets reliable people to pet sit for her and pays them less than £1000 PA.

My daughter has asked me to help her (when double booked, holidays etc) and wonders if I could pay voluntary class 2 NI at £3.15 per week under the less than £1000 income rules, thus achieving my 2 years NI shortfall 'on-the-cheap'.

Link to the gov table referencing the below £1 income (scroll down one page) https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

My other income is £30k PA DB pension where i pay tax but no NI.

Is it permissible for me to earn £164 PA (as described above), pay it all in NI and get my final 2 years NI contributions on the cheap or have I lost the plot?

If possible, what are the admin steps required for me to deliver the plan?

Many thanks!

No.  You could earn £123/week for a full tax year, as an employee, pay no NI and get a qualifying year.  Providing the employer is registered with HMRC and files their RTI data as required.

Or you you could become self employed (or a partner) and file Self Assessment returns and that would open up the voluntary Class 2 option even if your turnover was less than £1,000.

But you seem want the best of both and that just isn't possible.

And you did ask about broadly the same thing not that long ago!

https://forums.moneysavingexpert.com/discussion/6348556/can-voluntary-class2-really-buy-a-years-pension-contribution-for-circa-358-6-if-you-earn-1000

itsmeagain

I asked again because I was confused and still confused with your new answer now. Also, my previous question was based on earning a £1000+ and having to pay tax also.

Your answer is 'No' but when I read this part "you could become self employed (or a partner) and file Self Assessment returns and that would open up the voluntary Class 2 option even if your turnover was less than £1,000" it implies to me that the answer to my question should be YES?

So I am genuinely confused as to why a PAYE can't become a DB pensioner and self employed, then pay class2 NI to gain more qualifying years? I thought that PAYE people could retire, become self employed and pay NI but could be wrong?

I honestly don't get the point that I am missing and it needs pointing out so that a child would get it?

Dazed_and_C0nfused

A genuinely self employed person registered with HMRC and completing annual Self Assessment returns can pay voluntary Class 2 National Insurance.

But your original post read, to me at least, as though you are trying to game the system.

If you are running a small business as a pet sitter them not sure what the problem is?

molerat

Quite simply put if you are employed by your wife and daughter's business to sit dogs you are not self employed so cannot pay class 2 and are subject to the employed persons rules.

If you were a self employed dog sitter offering your services to anyone who asked then you could pay class 2.

itsmeagain

Dazed_and_C0nfused said:

A genuinely self employed person registered with HMRC and completing annual Self Assessment returns can pay voluntary Class 2 National Insurance.

But your original post read, to me at least, as though you are trying to game the system.

If you are running a small business as a pet sitter them not sure what the problem is?

Thanks - so now you've re-read, are you saying that the answer to the genuine scenario (not staged) is now YES?

And... does the fact that that the income is below £1k make any difference to the admin/mechanics of someone earning just above £1k?

SusieT

At the moment, it reads as if your daughter and wife are self employed running the pet care business. You are retired and have nothing to do with the business.
 
If you went to work for your daughter/wife you would be employed by them, they would register as an employer with HMRC and could pay you £123 a week (or monthly equivilent) which would get you NI credits without you actually paying NI - although as you are drawing a pension I imagine you would have to pay BR tax and claim any overpayment after the end of the tax year. 

If you wanted to register as self employed and join your wife and daughter in the business which would mean working alongside them as an equal, or would mean you working for them and possibly other people as well as a freelance dog walker/sitter/cat sitter, or you could do work for yourself doing dog/cat sitting (not specfically these jobs, but using them as examples of self employment) then if you were genuinely self employed and earning money you could pay class 2 

Dazed_and_C0nfused

It is quite clear that someone who is self employed, registers as such with HMRC and completes a Self Assessment return (correctly) can pay voluntary Class 2 National Insurance.

Have you actually read through the latest Self Assessment return and self employments pages (and accompanying help notes) to see what is involved?

I have no idea why you thought this might not be possible, especially after the explanations in your other thread.

Dazed_and_C0nfused

SusieT said:

At the moment, it reads as if your daughter and wife are self employed running the pet care business. You are retired and have nothing to do with the business.
 
If you went to work for your daughter/wife you would be employed by them, they would register as an employer with HMRC and could pay you £123 a week (or monthly equivilent) which would get you NI credits without you actually paying NI - although as you are drawing a pension I imagine you would have to pay BR tax and claim any overpayment after the end of the tax year. 

If you wanted to register as self employed and join your wife and daughter in the business which would mean working alongside them as an equal, or would mean you working for them and possibly other people as well as a freelance dog walker/sitter/cat sitter, or you could do work for yourself doing dog/cat sitting (not specfically these jobs, but using them as examples of self employment) then if you were genuinely self employed and earning money you could pay class 2 

I would agree with all of that apart from the bit in bold.  There would be no reason for there to be any repayment due.

Silvertabby

If you don't qualify for Class 2s, two years of Class 3s still offer an excellent return for your money.

itsmeagain

Dazed_and_C0nfused said:

It is quite clear that someone who is self employed, registers as such with HMRC and completes a Self Assessment return (correctly) can pay voluntary Class 2 National Insurance.

Have you actually read through the latest Self Assessment return and self employments pages (and accompanying help notes) to see what is involved?

I have no idea why you thought this might not be possible, especially after the explanations in your other thread.

On this thread (and the last one), there was some Yes & No-ing, but there's a subtle difference this time. I'm specifically looking at the below £1000 income category for self employed that I showed on the link. Previously I was asking about the over £1000 category where I knew I'd have to fill in a self assessment & pay tax.

Because there is a category for above £1000 AND below £1000, I'm wondering if that makes any difference to the admin process involved?

You see, I put the question to HMRC (phone call) and they told me that I don't need to declare such low income, but the person that I spoke to didn't know anything about how I pay the class 2 NI in that scenario because that was another department!

So, was the person at HMRC correct? If so, do I become a special case where I still need to fill in a self assessment to permit the voluntary class2 in the same way as an over £1000 earner has to, or is there a special way of paying the NI for a sub £1000 earner that doesn't require the self assessment to get the class2 NI?

No I haven't read the notes - is there a link that you could share please describes the process for a sub £1000 self employed person paying class2 NI?