Class 2 NIC self employed

Dazed_and_C0nfused

Rtj123 said:

Nomunnofun1 said:

Dazed_and_C0nfused said:

Rtj123 said:

Nomunnofun1 said:

Rtj123 said:

SacredStephan said:

LITRG says:
From 6 April 2024, self-employed taxpayers no longer need to pay class 2 NIC. However, in certain circumstances you may wish to pay class 2 NIC voluntarily (see the heading below).

https://www.litrg.org.uk/working/self-employment/nic-self-

Thanks. Going from that, I should be paying as I’m above the threshold of £12750? As my total income is £14080. Confused why it is saying I don’t have to pay any or am I reading it wrong?

No - SacredStephan mentioned ‘from 6th April 2024’ which is not relevant as the return relates to 2023/24. 

Can you provide a breakdown of the calculation? You are sure class 2 is not included?

My total income is £14326
my expenses are £233
So, total taxable profit = £14093

It then says, ‘total amount due for 2023 - 2024 = £441.67
and
 HM Revenue and Customs will allocate your payments against any Class 2 National Insurance first unless you have outstanding debts.

Without the full details of the calculation it's difficult to understand what's happened.

Were you Scottish resident in 2023-24?

The tax and class 4 NIC due on £14093 is exactly £441.67. 

Can’t think of an explanation.

That’s correct but shouldn’t I be paying class 2 NIC also?

It certainly appears that you should be.

Have you had Class 2 NI included in Self Assessment calculations in previous years?

Some people have had issues in the past as they were registered for Self Assessment but not registered with HMRC as self employed (and filling in a Self employment page on your return doesn't count in that regard).

Rtj123

hi
yes I’ve always had class 2 included in my self assessments. I have a UTR code and have always paid class 2 every year whether that be voluntary or not.

Rtj123

SORTED
i clicked on ‘update your self employment details’ button on the class 2 NIC page. It then said I owe £179.40 for 23-24.
it asked me to ‘review self employment details’ and has box as below -

Start and end date or period that can be updated

Start date	End date
Continuing from the previous year	Ongoing

I clicked back to the class 2 page and clicked ‘recalculate’ and it’s now showing I owe £179.40 and my final tax calculation has changed to include it.

terrible site from hmrc the whole process is confusing.

InMyDreams

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Nomunnofun1

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Rtj123

Nomunnofun1 said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Dazed_and_C0nfused

Rtj123 said:

Nomunnofun1 said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Basically yes.  You can either claim actual expenses or the trading allowance, not both.

https://www.litrg.org.uk/working/self-employment/trading-allowance

Nomunnofun1

Rtj123 said:

Nomunnofun1 said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Box 10.1 - you claim the trading allowance or actual expenses - your choice! 

https://assets.publishing.service.gov.uk/media/65fd5a08f1d3a0001d32ad9b/sa103s-2024.pdf

Rtj123

Nomunnofun1 said:

Rtj123 said:

Nomunnofun1 said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Box 10.1 - you claim the trading allowance or actual expenses - your choice! 

https://assets.publishing.service.gov.uk/media/65fd5a08f1d3a0001d32ad9b/sa103s-2024.pdf

Thankyou. Even on an income of £14356 I can still do this?

Rtj123

Dazed_and_C0nfused said:

Rtj123 said:

Nomunnofun1 said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Basically yes.  You can either claim actual expenses or the trading allowance, not both.

https://www.litrg.org.uk/working/self-employment/trading-allowance

I have removed the allowable expenses and instead entered £232 into the trading allowance box. However when I get to the end my tax bill is still showing as £621. How do I get the payment reduced?