Huge gap in NI record

mugwuffin1000

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

I have made a couple of voluntary contributions, but with finances tight I can't fill many more voluntarily.

It has been mentioned to me that I might have been eligible for Working Tax Credit, and my NI record would have been completed for me.  Could that be done retrospectively?

Definitive information on this online is very sparse and HMRC have had technical problems every time I've called.

Does anyone know?

Dazed_and_C0nfused

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

I have made a couple of voluntary contributions, but with finances tight I can't fill many more voluntarily.

It has been mentioned to me that I might have been eligible for Working Tax Credit, and my NI record would have been completed for me.  Could that be done retrospectively?

Definitive information on this online is very sparse and HMRC have had technical problems every time I've called.

Does anyone know?

Doesn't that mean you should have been filing Real Time Information data?

p00hsticks

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

mugwuffin1000

p00hsticks said:

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

I do use an accountant, and am working through a limited company.

Now that the required payment threshold has been reached (£533 per month according to HMRC), I run PAYE.

EnPointe

p00hsticks said:

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

or the OP is learning  what the  actual costs of   manipulating the  wage vs  dividend split  means 

mugwuffin1000

EnPointe said:

p00hsticks said:

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

or the OP is learning  what the  actual costs of   manipulating the  wage vs  dividend split  means 

No dividend ever paid.  Only just break even, with rising operating costs.

squirrelpie

I know nothing about the subject but I just looked at https://www.gov.uk/working-tax-credit and then https://www.gov.uk/child-tax-credit

They both say "Tax credits end on 5 April 2025. No more payments will be made after that." but the working tax credit page says "You can only make a claim for Working Tax Credit if you already get Child Tax Credit." whilst the child tax credit page says "You can only make a claim for Child Tax Credit if you already get Working Tax Credit."! So it seems to be Catch 22!

Anyway, it seems like this topic is better placed in the benefits section rather than the pensions one; somebody there might know about retrospective claims.

Marcon

mugwuffin1000 said:

p00hsticks said:

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

I do use an accountant, and am working through a limited company.

Now that the required payment threshold has been reached (£533 per month according to HMRC), I run PAYE.

Something doesn't sound right.

What advice has your accountant been giving you over the last 19 years in respect of this?

See https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

You say you have a company, which suggests you are a director - and NI for directors is based on pay for the whole year (not per pay period). If your company has paid you at the LEL you should automatically get NI credits without either you or your limited company (as your employer) actually paying NI, assuming your company was  registered for PAYE during the whole time - was it? Have you been an employee, or has remuneration been by way of a director's fee?

If you don't run your own payroll, it's very easy to do so using HMRC's free software for small companies: https://www.gov.uk/basic-paye-tools Could save you some money if you are currently paying someone else to do it for you.

mugwuffin1000

Marcon said:

mugwuffin1000 said:

p00hsticks said:

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

I do use an accountant, and am working through a limited company.

Now that the required payment threshold has been reached (£533 per month according to HMRC), I run PAYE.

Something doesn't sound right.

What advice has your accountant been giving you over the last 19 years in respect of this?

See

You say you have a company, which suggests you are a director - and NI for directors is based on pay for the whole year (not per pay period). If your company has paid you at the LEL you should automatically get NI credits without either you or your limited company (as your employer) actually paying NI, assuming your company was  registered for PAYE during the whole time - was it? Have you been an employee, or has remuneration been by way of a director's fee?

If you don't run your own payroll, it's very easy to do so using HMRC's free software for small companies: Could save you some money if you are currently paying someone else to do it for you.

I've only had accountancy advice in respect of filing annual returns etc, not personal tax / NI matters.

I was paid under the LEL, so did not run PAYE and no NI record was completed.  A couple of years ago I realised this was a bad idea and changed to PAYE, and paid myself slightly more, and now my NI is being completed automatically.  Before that point the company didn't meet the minimum criteria required to register for PAYE.

I suppose my main question is whether I may have been eligible for Working Tax Credits the whole time, and whether that would have led to my NI contributions being completed, and whether that can be applied for retrospectively.

p00hsticks

mugwuffin1000 said:

Marcon said:

mugwuffin1000 said:

p00hsticks said:

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

I do use an accountant, and am working through a limited company.

Now that the required payment threshold has been reached (£533 per month according to HMRC), I run PAYE.

Something doesn't sound right.

What advice has your accountant been giving you over the last 19 years in respect of this?

See

You say you have a company, which suggests you are a director - and NI for directors is based on pay for the whole year (not per pay period). If your company has paid you at the LEL you should automatically get NI credits without either you or your limited company (as your employer) actually paying NI, assuming your company was  registered for PAYE during the whole time - was it? Have you been an employee, or has remuneration been by way of a director's fee?

If you don't run your own payroll, it's very easy to do so using HMRC's free software for small companies: Could save you some money if you are currently paying someone else to do it for you.

I suppose my main question is whether I may have been eligible for Working Tax Credits the whole time, and whether that would have led to my NI contributions being completed, and whether that can be applied for retrospectively.

That's more a question for the Benefits board that this one, but I'd be very doubtful if it were possible to claim retrospectively, especially as that benefit is being phased out and as far as I'm aware it's not now possible to make a new claim 
Benefits & tax credits — MoneySavingExpert Forum

Marcon

mugwuffin1000 said:

Marcon said:

mugwuffin1000 said:

p00hsticks said:

mugwuffin1000 said:

Hi,

I have a very small company, and despite working full time, I've always paid myself at the LEL (until very recently), below the PAYE requirements, and I therefore have a 19 year hole in my NI contributions.

That doesn't sound right - do you use an accountant ?
Are you working through  limited company ?
How have you been reporting your salary to HMRC ?  

I do use an accountant, and am working through a limited company.

Now that the required payment threshold has been reached (£533 per month according to HMRC), I run PAYE.

Something doesn't sound right.

What advice has your accountant been giving you over the last 19 years in respect of this?

See

You say you have a company, which suggests you are a director - and NI for directors is based on pay for the whole year (not per pay period). If your company has paid you at the LEL you should automatically get NI credits without either you or your limited company (as your employer) actually paying NI, assuming your company was  registered for PAYE during the whole time - was it? Have you been an employee, or has remuneration been by way of a director's fee?

If you don't run your own payroll, it's very easy to do so using HMRC's free software for small companies: Could save you some money if you are currently paying someone else to do it for you.

I've only had accountancy advice in respect of filing annual returns etc, not personal tax / NI matters.

I was paid under the LEL, so did not run PAYE and no NI record was completed.  A couple of years ago I realised this was a bad idea and changed to PAYE, and paid myself slightly more, and now my NI is being completed automatically.  Before that point the company didn't meet the minimum criteria required to register for PAYE.

I suppose my main question is whether I may have been eligible for Working Tax Credits the whole time, and whether that would have led to my NI contributions being completed, and whether that can be applied for retrospectively.

I'm afraid it doesn't look likely. See https://www.litrg.org.uk/benefits/tax-credits/backdating-tax-credits#:~:text=If%20you%20move%20from%20tax,the%20qualifying%20disability%20benefit%20claim.