Living and Working Overseas - But also self employed in UK - Can I pay NI Class 2?

Schisty

I am working overseas and have not paid NI for the last ten years, I am in the process of paying for the missing years. I believe I will have to pay Class 3 for those missing years because I was not working immediately before going abroad.

Once they are paid I want to find out if I am eligible to pay Class 2 or if I should continue to pay Class 3. 

I was born in, studied in and worked in the UK before moving to work and live overseas, I also have my family home (owned by me and my brother) in the UK. That is the place that I return to when I go back to the UK - I believe these factors makes me "Ordinarily Resident" according to the .gov website.

I started to sell digital resources online on a specialist (education) website. I registered on there with my UK address and use my UK bank account. Because of this I think that I need to register as a sole-trader. When I first started I was not making much money but just in the last year or two it has increased to a few thousand pounds per year. I want to make sure I am paying all tax that is due on these profits. 

So my question is can I register as a sole-trader if I am out of the country but ordinarily resident?  I think that if I am classed as a sole-trader I should be eligible to pay Class 2 contributions, but I am not sure if that's possible.

Any help is much appreciated.

mark55man

https://www.gov.uk/national-insurance-if-you-go-abroad

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

These seem to be helpful - I am not an expert but I do also recall a number of threads - so searching may give you more information

Suhusa

You might not be ordinarily resident, depending on how often you come to visit the UK and how many days you work abroad. There's a number of different tests:

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

These are by no means easy and fast to do, so if haven't already gone though those tests in detail I'd suggest sitting down for an afternoon, and doing the calculations in excel. There's also a hierarchy to the tests, so the result from one test can 'overrule' the result from another test.

Most importantly living in one country and (nominally or genuinly) working in another one can be messy when it comes to tax. So you should definitely talk to someone who's experienced in tax in the UK and the country you live in (ideally that would be a single person, but you may have to talk to two tax specialists in cross-border taxation, one for each country). That country will have an entirely different test for residency, so they may count you as resident, which is likely to make you liable to pay tax there, regardless of whether the UK sees you as resident in the UK. Double taxation agreements are also wildly different for each country, so you really need detailed professional advice for your situation.

Also, might I ask when you stopped working before you moved? What counts as 'immediately' is remarkably ill-defined.

Schisty

Suhusa said:

You might not be ordinarily resident, depending on how often you come to visit the UK and how many days you work abroad. There's a number of different tests:

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

These are by no means easy and fast to do, so if haven't already gone though those tests in detail I'd suggest sitting down for an afternoon, and doing the calculations in excel. There's also a hierarchy to the tests, so the result from one test can 'overrule' the result from another test.

Most importantly living in one country and (nominally or genuinly) working in another one can be messy when it comes to tax. So you should definitely talk to someone who's experienced in tax in the UK and the country you live in (ideally that would be a single person, but you may have to talk to two tax specialists in cross-border taxation, one for each country). That country will have an entirely different test for residency, so they may count you as resident, which is likely to make you liable to pay tax there, regardless of whether the UK sees you as resident in the UK. Double taxation agreements are also wildly different for each country, so you really need detailed professional advice for your situation.

Also, might I ask when you stopped working before you moved? What counts as 'immediately' is remarkably ill-defined.

That link makes it pretty clear cut - thank you for your help!