Filling NI Gaps for self employed - does Class 2 Rate still apply for missing years from 2006?

supersezzie

I can't find this answer anywhere.

If you were self employed and only owed Class 2 Voluntary NI contributions, so you have gaps in your record, going back to 2006, would they still be charged at this rate (i.e. approx £165 per year) to backfill them by the April deadline? 

HMRC is requesting £824 per missed year to plug 8 year of gaps from 2006. Yet the self employment records show tax bills of no more than £300 and sometimes 0 in these missing years, indicating that this would almost certainly have been a situation where only Class 2 NI rules would apply, or a minimal amount of class 4 at 6%. 

I want to know if this is because there's a cut off point to pay at the Class 2/4 rate and it's too late so now it's £824. Or if for some reason the records haven't taken the self employment into account as I'm really hoping is the case and these years can be backfilled at a more affordable rate! 

I looked here and it seems to be suggesting the Class 2 rate might still apply, so this is hopefully an error on the NI record? Is this a known thing that it is doing to self-employed people? You'd think the system would cross check against the tax return and profits recorded for each year before it tells you what you owe? The cynic in me thinks it's trying to fleece people to overpay... 

https://www.gov.uk/voluntary-national-insurance-contributions/rates

molerat

Your NI record only ever shows the class 3 option.

Yes you can pay class 2 back to 2006-07

But .....

It's complicated.  For some years you need to have registered for a small earnings exception which means you were entitled to pay but didn't have to.  If you did not register because you thought you were not earning enough so didn't need to pay would mean you would lose the entitlement to pay and would have to pay class 3.  You need to speak to HMRC and discuss your options.