Self employed. 2023/4 tax year. Correct way to pay NI for state pension credit?

ProDave

In previous years I have paid class 2 NI, sometimes compulsory, sometimes voluntary depending on profit.  It all went a bit wrong last year when there was a system problem and my NI for last year did not show on my NI record.  Now finally resolved after much complaining.

So I understand things are changing from the 2023/4 tax year onwards?  I am about to submit my 2023/4 tax return but if the rules and requirements have changed, I want to be sure I pay NI in the correct way so it shows as a full year on my NI record.  My profit for the year will be below the level at which you have to pay class 2 NI.

Advice please on the correct way to do it with the new rules?

Dazed_and_C0nfused

ProDave said:

In previous years I have paid class 2 NI, sometimes compulsory, sometimes voluntary depending on profit.  It all went a bit wrong last year when there was a system problem and my NI for last year did not show on my NI record.  Now finally resolved after much complaining.

So I understand things are changing from the 2023/4 tax year onwards?  I am about to submit my 2023/4 tax return but if the rules and requirements have changed, I want to be sure I pay NI in the correct way so it shows as a full year on my NI record.  My profit for the year will be below the level at which you have to pay class 2 NI.

Advice please on the correct way to do it with the new rules?

That can mean one of two things now, quite a good article here.

https://www.att.org.uk/technical/news/class-2-national-insurance-whats-changing-april-2024

AIUI it's basically still paid via your Self Assessment return (when necessary).

ProDave

Thanks.  From that linked article, I fall into this category

"Self-employed individuals with profits below £6,725 in 2023/24 do not have to pay Class 2 NICs either, but don’t benefit from a National Insurance Credit. They can, however, choose to pay Class 2 NICs voluntarily at the standard rate (£3.45 per week) in order to preserve entitlement to those contributory state benefits. "

Also of relevance to me is the changes take place FROM April 2024, so in fact the 2023/4 tax year I am talking about is under the old rules so I just pay voluntary class 2 NI to get my NI credit for the year for my state pension.  And just hope this year the system works and it shows on my NI record for my state pension without all the problems I have just has with the previous year.

If the 2023/4 payment works, that will be me up to a full NI record for a full state pension that cannot be improved further, so NI payments beyond that are of little interest to me (I am retiring anyway)

skycatcher

Hi ProDave,

I'm in a very similar position! Can i ask how and VC who you complained to to get your record sorted for 22/23 as mines still not showing and after a call to HMRC (which was a waste of time)  after letter still isn't fixed ( I had also paid via my online return voluntarily). 

I have just submitted my return for 23/24 and paid voluntarily again. This current year will be my last!

ProDave

skycatcher said:

Hi ProDave,

I'm in a very similar position! Can i ask how and VC who you complained to to get your record sorted for 22/23 as mines still not showing and after a call to HMRC (which was a waste of time)  after letter still isn't fixed ( I had also paid via my online return voluntarily). 

I have just submitted my return for 23/24 and paid voluntarily again. This current year will be my last!

A complaint as shown here resolved it https://www.gov.uk/complain-about-hmrc

I submitted an on line complaint giving my NI and UTR numbers, the dates and amounts I paid and explaining that the voluntary class 2 NI was still not showing on my record after 6 months and that various phone calls to the normal help lines had failed to resolve it.  I had a reply just over a week ago saying the NI payment has now been allocated and indeed it is now showing on my record as year is full, 52 weeks self employment.

It was while trying to get last years NI sorted out that one of the many statements I came across was that is was a system fault caused by updating the system ready for 2023/4 that caused the problem.  That is why I was expecting the 2023/4 submission to be different.  But in fact it is not as the changes will not affect self employed until the 2024/5 tax year.  Incompetence seems to rule.

skycatcher

Just to follow up - I raised the formal complaint and they eventually sorted out my NI last week. Then on Saturday I got a letter saying I owed them tax from the year they credited my NI from....i.e. I think they charged my account twice for the NI!.....looks like another complaint coming.

skycatcher

skycatcher said:

Just to follow up - I raised the formal complaint and they eventually sorted out my NI last week. Then on Saturday I got a letter saying I owed them tax from the year they credited my NI from....i.e. I think they charged my account twice for the NI!.....looks like another complaint coming.

Just a follow up to the follow up....I replied via the email address I had for my formal complaint regarding this lastest cockup and got a reply yesterday apologising for this latest problem and stating that they had fixed it! I have checked and it all would now appear to be in order!!