Class 3 NICs as a company director

monkey-fingers

I started up a Ltd company this year and because I have already previously breached my £12,570 tax allowance, I'm not paying myself a wage.

Normally, under these circumstances, people would pay Class 3 NICs to ensure pension contribution. Except that I don't need to as my pension is already full (Although I'm in my mid 50s, I've not missed a year since I was 18).

Other than trying to read the crystal ball and seeing them extend to 40 years or something, is there any point in paying Class 3 NICs?

Grumpy_chap

monkey-fingers said:

I started up a Ltd company this year and because I have already previously breached my £12,570 tax allowance, I'm not paying myself a wage.

Normally, under these circumstances, people would pay Class 2 NICs to ensure pension contribution. Except that I don't need to as my pension is already full (Although I'm in my mid 50s, I've not missed a year since I was 18).

Other than trying to read the crystal ball and seeing them extend to 40 years or something, is there any point in paying Class 2 NICs?

I am not sure that is correct.

AIUI, Class 2 NICs are only for self employed (sole trader).

Having started a Ltd Co., of which you are sole Shareholder and sole Director, you are now an employee of that Ltd Co.  The £12.5k that is drawn as salary is subject to employer NI, employee NI and income tax in the normal manner.

NorthYorkie

I think you must be referring to Class 3 NIC, i.e. voluntary contributions

Jeremy535897

Class 3, which at £923 for 2025/26, is a lot dearer than class 2, and is your only option. If the pension forecast in your online personal tax account at HMRC confirms that there is no way of increasing your pension, you'd probably be better gambling on something that at least says you might get something in return.

molerat

Directors pay "standard" NI based on their annual income rather than per pay period.  If no income then they would need to pay class 3, class 2 is only for self employed.  If your forecast shows you have already reached the max, as confirmed in the texts below the big green box, there is no point paying any more.

monkey-fingers

Thank you all. You're right, it's Class 3 NICs.

OK, no worries. And indeed, I have a green box!

molerat

Everyone has a green box, it is what is written below it that is most important.

monkey-fingers

molerat said:

Everyone has a green box, it is what is written below it that is most important.

You can get your State Pension on 3 October 2038

Your forecast is £230.25 a week, £1,001.18 a month, £12,014.12 a year

Dazed_and_C0nfused

monkey-fingers said:

molerat said:

Everyone has a green box, it is what is written below it that is most important.

You can get your State Pension on 3 October 2038

Your forecast is £230.25 a week, £1,001.18 a month, £12,014.12 a year

The full explanation, you might only have accrued a smaller amount.