Passive income - class 2 NI contributions?

NumberMan

I wrote some books some time ago and currently receive around £1-£2k pa royalties from these but am no longer writing. I report this as self-employed income alongside my main job.

I will shortly be retiring from my main job and am looking for the most cost effective way to purchase future NI years for state pension entitlement. My understanding is that self-employed class 2 NI contributions (c.£200k) are significantly cheaper than the usual class 3 NI contributions (c.£900pa).

My question is do i still count as self-employed for the purpose of paying voluntary class 2 NI contributions if i have self-employed income but don't do any actual work?

Jeremy535897

This is a difficult question, as post cessation receipts are not the same as trading receipts. The simplest solution would be to ensure you write something every year, however trivial, to preserve the trade.

NumberMan

Jeremy535897 said:

This is a difficult question, as post cessation receipts are not the same as trading receipts. The simplest solution would be to ensure you write something every year, however trivial, to preserve the trade.

Thanks very much for this. Is there any test hmrc could apply to determine if i was carrying on a trade? Eg if i wrote something but didn't release it (or released it in a later year) would that count (ie is doing something trivial definitely enough?)

Jeremy535897

It is inconceivable that HMRC would ever ask such a question, but why not write something at least once a year and submit it to someone you know in the business? It doesn't matter if they don't publish it. You have evidence that you are still working.