Filling gaps in National Insurance to boost state pension

David_Peckham

Apologies if this has been covered elsewhere. 

I am self employed and I have just checked my National Insurance record. 

From 2006-07 right through to 2023-24 my year `is not full`. 

Nearly all of those years it's suggested I may pay a voluntary contribution of £824.20. 

What I don't understand is that in most years I have paid class 4 NI. 

So for example, if I have paid Class 4 NI of £1658.34 in 2019-20 why is there a shortfall of £824.20 and how is it calculated? 

 

xylophone

See

https://www.gov.uk/national-insurance/what-national-insurance-is-for#:~:text=If you're self-employed,towards state benefits or pensions.

If you’re self-employed and make a profit of more than £12,570 a year, you pay Class 4 contributions. These do not count towards state benefits or pensions.

Dazed_and_C0nfused

David_Peckham said:

Apologies if this has been covered elsewhere. 

I am self employed and I have just checked my National Insurance record. 

From 2006-07 right through to 2023-24 my year `is not full`. 

Nearly all of those years it's suggested I may pay a voluntary contribution of £824.20. 

What I don't understand is that in most years I have paid class 4 NI. 

So for example, if I have paid Class 4 NI of £1658.34 in 2019-20 why is there a shortfall of £824.20 and how is it calculated? 

 

Class 4 NI doesn't entitled you to anything really, it's just an extra tax.

Are you registered as self employed with HMRC?

That is different to being registered for Self Assessment.

Do your Self Assessment calculations from recent years show a Class 2 NI charge? 

David_Peckham

Hi, 

Yes, I am registered with HMRC as self employed. 

I have only looked at several years tax returns, but I have paid Class 4 NI only and not Class 2 contributions.  

Dazed_and_C0nfused

David_Peckham said:

Hi, 

Yes, I am registered with HMRC as self employed. 

I have only looked at several years tax returns, but I have paid Class 4 NI only and not Class 2 contributions.  

That suggests you aren't registered as self employed.

For years prior to 2015-16 (or thereabouts) it was usually paid by direct debit.  Did you previously pay by direct debit?

David_Peckham

I have been self employed for many years and have never made any payments to HMRC by direct debit. 

Dazed_and_C0nfused

David_Peckham said:

I have been self employed for many years and have never made any payments to HMRC by direct debit. 

Did you pay Class 2 NI by any other method?

David_Peckham

Also...my self assessment return states I receive profit from self-employment.

Dazed_and_C0nfused

David_Peckham said:

Also...my self assessment return states I receive profit from self-employment.

But are you sure you are registered as self employed?

It might seem a bit odd but the two things, Self employment and Self Assessment, are different in HMRC's eyes.

Have you ever completed form CWF1?

Do you think you have ever paid any Class 2 NI?

Marcon

Something sounds odd. See https://www.gov.uk/self-employed-national-insurance-rates in particular:

If your profits are £6,725 or more a year

Class 2 contributions are treated as having been paid to protect your National Insurance record. This means you do not have to pay Class 2 contributions.

If your profits are more than £12,570 a year, you must pay Class 4 contributions.

OP, suggest you request a call back (to stop the clock re the 5 April deadline) while you sort things out:

https://secure.dwp.gov.uk/request-a-call-back-to-pay-voluntary-national-insurance-contributions/contact-form

molerat

Marcon said:

Something sounds odd. See https://www.gov.uk/self-employed-national-insurance-rates in particular:

If your profits are £6,725 or more a year

Class 2 contributions are treated as having been paid to protect your National Insurance record. This means you do not have to pay Class 2 contributions.

If your profits are more than £12,570 a year, you must pay Class 4 contributions.

Only from 24/25

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