N2 contributions as a self-employed person

larryharvey

Hi,

Can someone help me here - I am below the upper profit limit with my company for the last tax year. I have read that I should contribute "£3.15 per week for each week you are self-employed, if your profits exceed the Lower Profits Limit in that tax year."

Does this mean that I would pay £163.80 and that would then count as one qualifying year paying National Insurance for state pension consideration?

xylophone

https://www.gov.uk/national-insurance/how-much-you-pay

If you’re self-employed

You pay Class 2 and Class 4 National Insurance, depending on your profits. Most people pay both through Self Assessment.

You may be able to pay voluntary contributions to avoid gaps in your National Insurance record if you:

• have profits of less than £6,725 a year from your self-employment
• have a specific job (such as an examiner or business owner in property or land) and you do not pay Class 2 National Insurance through Self Assessment

If you have gaps and do not pay voluntary contributions, this may affect the benefits you can get, such as the State Pension.

If you have a specific job and you do not pay Class 2 National Insurance through Self Assessment, you need to contact HM Revenue and Customs (HMRC) to arrange a voluntary payment.

larryharvey

What is the minimum amount of NI you need to pay for it to be a qualifying year?

Dazed_and_C0nfused

larryharvey said:

What is the minimum amount of NI you need to pay for it to be a qualifying year?

£0.00

Earning at the LEL each week (as an employee) would gain a year without actually paying any NI.

Your thread title refers to self employment but then in your opening post you say this.

I am below the upper profit limit with my company

Are you definitely self-employed?

larryharvey

Dazed_and_C0nfused said:

larryharvey said:

What is the minimum amount of NI you need to pay for it to be a qualifying year?

£0.00

Earning at the LEL each week (as an employee) would gain a year without actually paying any NI.

Your thread title refers to self employment but then in your opening post you say this.

I am below the upper profit limit with my company

Are you definitely self-employed?

I meant the self-employed company I run. It's not with Companies House or anything.

Does this mean if my profits are equivalent to the LEL it is the same thing?

Dazed_and_C0nfused

larryharvey said:

Dazed_and_C0nfused said:

larryharvey said:

What is the minimum amount of NI you need to pay for it to be a qualifying year?

£0.00

Earning at the LEL each week (as an employee) would gain a year without actually paying any NI.

Your thread title refers to self employment but then in your opening post you say this.

I am below the upper profit limit with my company

Are you definitely self-employed?

I meant the self-employed company I run. It's not with Companies House or anything.

Does this mean if my profits are equivalent to the LEL it is the same thing?

What is a "self employed company"?

You seem to be mixing up self employment and running your own (ltd) company.

The LEL related to employees and directors, not someone who is self employed.

Class 2 NI is what counts for someone who is self employed.

larryharvey

Dazed_and_C0nfused said:

larryharvey said:

Dazed_and_C0nfused said:

larryharvey said:

What is the minimum amount of NI you need to pay for it to be a qualifying year?

£0.00

Earning at the LEL each week (as an employee) would gain a year without actually paying any NI.

Your thread title refers to self employment but then in your opening post you say this.

I am below the upper profit limit with my company

Are you definitely self-employed?

I meant the self-employed company I run. It's not with Companies House or anything.

Does this mean if my profits are equivalent to the LEL it is the same thing?

What is a "self employed company"?

You seem to be mixing up self employment and running your own (ltd) company.

The LEL related to employees and directors, not someone who is self employed.

Class 2 NI is what counts for someone who is self employed.

Thank you.

Do you know what is the minimum I would be expected to pay in Class 2 NI payments/contributions in one year, for that year to qualify?

Dazed_and_C0nfused

This should help.

https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed#:~:text=Prior to the 2022/23,11,908 in 2022/23).

It's got very messy for 2022:23 but earlier years were fairly straightforward and for the past few years any Class 2 NI due forms part of your Self Assessment liability