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

moo121

itsmeagain said:

I'm not sure where 'home boarding' was ever mentioned by me? I'm talking about a pet service at the customers house.

Pet sitting is like baby sitting - you generally do it at the 'parents' home.

Apologies, I read your post quickly and misunderstood. Please ignore if not applicable.

MankyVegSoup

Haven't read the whole thread so apologies if this is already covered. This was my situation for the last financial year (21-22) - I'm semi retired:

Registered self employed (have been for 20 years).

Self employed earnings <£1000 

Started part time employment in March so a very small earned income for the tax year.

On my tax return I had to tick the box to state part time earnings over £1000. This opened up the self employed income section.

I then entered some very basic details and opted to pay voluntary Class 2 NI contributions.

The key was to initially enter that income was over the £1000 (mine was around £950). I was battling with my conscience over whether to declare a slightly over £1000 income in order to pay the voluntary Class 2, but I didn't have to. Once I'd got into the self employed section it worked fine.

itsmeagain

MankyVegSoup said:

Haven't read the whole thread so apologies if this is already covered. This was my situation for the last financial year (21-22) - I'm semi retired:

Registered self employed (have been for 20 years).

Self employed earnings <£1000 

Started part time employment in March so a very small earned income for the tax year.

On my tax return I had to tick the box to state part time earnings over £1000. This opened up the self employed income section.

I then entered some very basic details and opted to pay voluntary Class 2 NI contributions.

The key was to initially enter that income was over the £1000 (mine was around £950). I was battling with my conscience over whether to declare a slightly over £1000 income in order to pay the voluntary Class 2, but I didn't have to. Once I'd got into the self employed section it worked fine.

So are you saying that paying voluntary class 2 when self employed on a low income turned out to be far easier than you imagined and your concerns about doing so have now melted away?

By the way, without you reading everything, it appears that people can still to pay class 2 in the less than £1000 income category if you compete the self assessment. The link in my first post shows that category in a table.

itsmeagain

jimi_man said:

To be fair to the OP this is a Money Saving Forum that encourages people to do so (legitimately). For example there is a long running thread on how to do the £2880 pension/tax thingy which saves approximately the same amount per year that the OP is looking to save. I don’t recall any ‘morality’ posts on whether people with large funds shouldn’t be doing this.  

Other threads are on how to salary sacrifice income below the child benefit amount, how to save here and there, etc etc. 

I’m not aware that it’s part of MSE policy that when people have done reasonably well in their retirement planning that they should be castigated for trying to further this. As has been noted on many occasions, people’s savings habits continue throughout their life so if one is a saver then one will continue to be a saver. No-one is going to voluntarily pay more tax (NI), that’s why we use ISAs and pensions. As long as it’s legitimate then I really don’t see the problem and it’s not my position to lecture the OP that he ‘has enough money’. 

AIUI though the OP is still confused about the correct method to do this although has been given the correct information earlier in the thread. 

I generally agree except for - which part of the process do you think that I'm still confused about? I thought that the only part of the process under question was the duff info that HMRC gave me on not needing to do the self assessment to get the class2?

You are quite right - this 'money saving expert' approach to achieving full state pension does seem to have turned in to a thread about the emotions, politics, morality and personal criticism for asking about using a legitimate process for someone that doesn't necessarily need more money (in some peoples 'opinion'), rather than simply advising on matter of fact. I doubt that there are many people that could survive without their sate pension that actually give it away! I thought there were forum rules covering such personal criticism, provoking/trolling behaviour.

There's 101 arguments people have about 'deserving' legitimate things, some of which you mention...

• £2880 pension recycling - state losing out
• Salary sacrifice not available to all - state losing out
• higher rate tax avoidance via pension input - state losing out
• pension input to regain child allowance - state losing out
• transfer of 10% of partners tax allowance - state losing out
• tax relief on pension input (that was never taxed in the first place) eg; £10k x 1.25 = £12.5 - state losing out
• moving job sites every 2 years to get travel expenses + other rights - state losing out
• company directors with partners as low paid secretaries - state losing out
• Free pension contribution for looking after grand kids - state losing out

The list goes on....
 

DT2001

The whole tax and pension system is too complex. When new rules are introduced there are quite often unintended consequences. Personally I think it is a swings and roundabouts thing for the vast majority  - we were ‘unfairly treated’ by my staying home and the OH earning above the child benefit threshold however when my OH became self employed she could reduce her income by employing me (genuinely) and our total income became more evenly distributed with CB then being received. We don’t get salary sacrifice or employers contributions but I have, in some years, paid voluntary NI and ‘gained’ a year for SP for very little. Now I pay for no gain(at the max).
I ‘play’ by the rules and have a friendly accountant who’ll confirm if it is black and white or grey. I do not touch grey schemes. When I started self employment I set out the facts to HMRC and asked for their confirmation that I was not employed.

If the OP complies by the rules that is fine. HMRC can always challenge his status.