Baffled when doing my Self-Assessment

JacobEdgar

This is my second time doing my Self Assessment online. Last year, I was just starting and I made 2706 GBP of profit after deducting expenses. Hence no tax was due to be paid. I am Self Employed.

This year, it came out as 8429 GBP. After continuing, the system tells me that 179 GBP is due to be paid as tax for Class 2 NICs. But everywhere, it states that nowadays, people who earn between 6000 and 12000 GBP is not liable to pay neither Class 2 nor Class 4 NICs.

I've searched everywhere and it states the same. Am I missing something? if I click continue and submit, it will automatically correct itself? doesn't sound good to me . 

Any ideas?

Dazed_and_C0nfused

JacobEdgar said:

This is my second time doing my Self Assessment online. Last year, I was just starting and I made 2706 GBP of profit after deducting expenses. Hence no tax was due to be paid. I am Self Employed.

This year, it came out as 8429 GBP. After continuing, the system tells me that 179 GBP is due to be paid as tax for Class 2 NICs. But everywhere, it states that nowadays, people who earn between 6000 and 12000 GBP is not liable to pay neither Class 2 nor Class 4 NICs.

I've searched everywhere and it states the same. Am I missing something? if I click continue and submit, it will automatically correct itself? doesn't sound good to me . 

Any ideas?

Have you ticked a box to say you wish to pay voluntary Class 2 NI?

grandweb

I think you are correct and I don't think there is the option or a need to pay if your profits are above £6725, which they are.

I assume you're looking at the correct year (i.e. your not late for the 23-24 self assessment). Do you see the £179 on the final calculation screen before the submission?

PennysIntoPounds

Sounds like as @Dazed_and_C0nfused says that the box is ticked for voluntary Class 2 NI contributions. If you don't have all your state pension years already filled I would really recommend paying this!

grandweb

PennysIntoPounds said:

Sounds like as @Dazed_and_C0nfused says that the box is ticked for voluntary Class 2 NI contributions. If you don't have all your state pension years already filled I would really recommend paying this!

I might be wrong, but I'm fairly sure that once you're earning over £6725 a year, there is no need to pay the NI contributions as you're already covered, but it's possible they still show the tick box to volunteer anyway. Also, if the self employment is from being a landlord, then you won't be covered and you'll need to pay to keep your full pension.

PennysIntoPounds

grandweb said:

PennysIntoPounds said:

Sounds like as @Dazed_and_C0nfused says that the box is ticked for voluntary Class 2 NI contributions. If you don't have all your state pension years already filled I would really recommend paying this!

I might be wrong, but I'm fairly sure that once you're earning over £6725 a year, there is no need to pay the NI contributions as you're already covered, but it's possible they still show the tick box to volunteer anyway. Also, if the self employment is from being a landlord, then you won't be covered and you'll need to pay to keep your full pension.

You're right, I was speculating from my own experiences.
Though the amount is now £6845!

JacobEdgar

Many thanks for all the replies. Turns out that HMRC continuously tells you how much you are going to pay, until one of the last screens where it tells you that you won't be paying it as you are earning between thresholds. Took me a long time to figure that out!