Backdating rules for self employed-Class 2

ni_formular

Can those that were self-employed, e.g 2006-2016, fill any gaps needed back to 2006? and pay at the class 2 rate? I have had read other posts and used that information to say i can, but after 3 attempts to put my case HMRC say NO. The last adviser did say a i could write a letter to them but that could take months to get any reply, leaving me in limbo or having to pay at class 3 rate now. 

molerat

For some earlier years you had to register for exemption to not pay class 2.  If you did then you can pay those years, if not then you can't as you are too late to pay your overdue NI.

ni_formular

Hi, according to the last adviser my profits were so low that some of previous years had been waived, i.e written off, i never received any letters from the tax office to inform me. Being that i never had to pay class 2 due to low profits why cant i not pay the voluntary contributions now? as far as i was aware the six year rule changed due to the new state pension coming in. I'm looking to get any 2 years from 2008-2015, i am no longer self employed, thanks for any help of advice. this from Age UK
'If you were self-employed but earning below a certain amount, payment

of Class 2 NI contributions was voluntary. You can choose to pay these

retrospectively (within the same time limits as Class 3 above). If you

would be eligible to pay Class 2 contributions'

ni_formular

More from Age UK Factsheet 19

State Pension

April 2024

'However, if you are under the new State Pension system i.e. you

reached State Pension age after 6 April 2016, you have until 5 April 2025

to pay voluntary Class 2 or Class 3 NI contributions for the years from

April 2006 to April 2017. These can affect your starting amount with

respect to the old State Pension entitlement,'

ni_formular

molerat said:

For some earlier years you had to register for exemption to not pay class 2.  If you did then you can pay those years, if not then you can't as you are too late to pay your overdue NI.

Hi molerat, just for clarification, even if you didn't owe any compulsory Class 2 payments, i didn't being a low earner and filled a SE tax return, unless you got the small earnings earnings exemption, the 6 year rule applies and hasn't changed. Hopefully that made sense. If i got that right  anyone who didn't tick the 'do you want make voluntary class 2 payments box' back in 2006-2016 cant now retrospectively make payments. Nevertheless the tax office should have informed me IMO. Not sure if ignorance is an excuse if i decide to claim in a letter that i should be entitled to pay any gaps at the class 2 rate now. Thanks for you help in this matter.

ni_formular

HMRC and Pension forecast service, so far, insist that this is the rule even if you were a low earner not required to pay compulsory class 2 when self employed. Only option is to pay Class 3 if you want to fill gaps going back to 2006? 
Is this correct?

Class 2 NI voluntary contributions from 2006

'For Class 2 contributions there is a strict six year limit with very limited scope outside of this to make any earlier payments' 

ni_formular

HMRC and Pension forecast service, so far, insist that this is the rule even if you were a low earner who were not required to pay compulsory class 2 or class 4 when self employed 2006-16. Only option now is to pay Class 3 if you want to fill any gaps going back to 2006-2016 period? 
Is this correct? in the case of those who didn't tick the pay voluntary class 2 box when filling out their tax return.
This from the HMRC forum was in reply to someone who had paid Class 4 but not class 2.

Class 2 NI voluntary contributions from 2006

'For Class 2 contributions there is a strict six year limit with very limited scope outside of this to make any earlier payments' 

molerat

You need to ask them why this does not apply to you

https://www.legislation.gov.uk/uksi/2001/1004/regulation/61B

ni_formular

Hi, thanks for that, i did point that out on my third call to them after reading your previous posts.
That person said my requirement to pay Class 2 had been waived? how can they waive a voluntary payment?
another said i should have ticked the box in the past to make voluntary payments or applied for a small earning exemption certificate. I argued my case and finally she said i would have could write to the tax office to get them to judge and that could take months leaving me in limbo. I have no idea why going off that legislation why i'm, being denied my entitlement to back pay class 2 voluntary contributions. nothing i have read online says i cant?

pinnks

I think HMRC may be correct in what they say but what follows could be off the mark.  Either way, OP will want to take a close look at the legislation...  

The starting point seems to be that every self-employed earner is "liable" to pay Class 2 NI unless they fall under one of the "exemptions", of which the Small Earnings Exemption (SEE) that existed until 5 April 2015 and which had to be claimed, is one.  This is, I think, different from the earnings thresholds above which NI is actually charged.  

Therefore, if a person could have claimed SSE but didn't they remain liable for Class 2 but those contributions remain unpaid and as they would now be paid more than 6 years after the due date, they would, I think, be treated as not paid, subject to that being overridden elsewhere... 

Regulation 61B allows people to pay voluntary Class 2 NI for years 2006/07 to 2015/16 if they were "entitled, but not liable, to pay" Class 2 NI for the respective year(s), so override the above.  However, absent a valid SEE for the year in question, the person would seem to still be "liable" to pay the Class 2 but has failed to pay it and so, if they now pay it, the normal 6-year rule would appear to prevail.  

If the above is wrong, I am sure someone with more knowledge than me can show the correct route the the maze...

molerat

I agree with the above but as small earnings exception ended at 5 April 2015 they should be able to pay years from 2015-16 unless of course the profit level was above the SPT, where I believe it was fairly easy not to pay class 2 when completing SA, which then gives the same answer.