State Pension Years' Claim

Tagnor

Hello,
I have been working as self employed for many years and paying my wife as secretary / PA all those years under the NI threshold for the work she does for my business. The payment to her has been declared on my tax returns every year as part of my expenses claim. She will be 66 in June this year and she just received a letter from the pensions service inviting her to claim her pension. However upon enquiries we have found out that most of those years have not been credited towards her pension reducing the amount payable considerably. 
Has anyone else been in similar situation and what can we do to correct these records?
Many thanks.

xylophone

I have been working as self employed for many years and paying my wife as secretary / PA all those years under the NI threshold for the work she does for my business. The payment to her has been declared on my tax returns every year as part of my expenses claim.

https://www.litrg.org.uk/tax-guides/employment/what-national-insurance-do-i-pay-employee

Are you sure that you set up the arrangement correctly?

molerat

Declaring it on your tax return is irrelevant, have you been completing employer returns ?

p00hsticks

I've only worked via a limited company so I don't know the ins and outs of how self-employment works, but it sounds to me as if your wife should possibly have been registered herself either as self-employed or as your employee.
How has the income she has been earning been declared to HMRC ?
I can't see that just listing it as expenses on your own return will be sufficient for them to register whether she is entitled to NI credits or not. 
People over on the small business board may be more familiar with the process that needs to be followed
Small biz MoneySaving — MoneySavingExpert Forum

xylophone

What exactly does your wife's state pension forecast to 5/4/22 show?

Dazed_and_C0nfused

Tagnor said:

Hello,
I have been working as self employed for many years and paying my wife as secretary / PA all those years under the NI threshold for the work she does for my business. The payment to her has been declared on my tax returns every year as part of my expenses claim. She will be 66 in June this year and she just received a letter from the pensions service inviting her to claim her pension. However upon enquiries we have found out that most of those years have not been credited towards her pension reducing the amount payable considerably. 
Has anyone else been in similar situation and what can we do to correct these records?
Many thanks.

What is there to correct?

You made a choice to pay her at that rate so why do you think her NI record is wrong?

It might be but nothing you have said indicates that it is.

Or do you mean you paid her above the LEL and failed to register as an employer 😳

whizzywoo

You should have been paying your wife's wages via an Employer PAYE scheme.  That way they would have been recorded as wages against her NI number.

If below the Primary threshold but above Lower Earnings Level threshold, neither you as Employer nor your wife would have paid any NI but she would have received NI credits for those years.

Did you not use an Accountant to do your tax return?  Any Accountant worth her or his salt would have advised you of the correct way to do it, and even done it for you.