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  • FIRST POST
    • caveman8006
    • By caveman8006 10th Jan 18, 2:26 PM
    • 64Posts
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    caveman8006
    SP credit for one-off payment of 40,000?
    • #1
    • 10th Jan 18, 2:26 PM
    SP credit for one-off payment of 40,000? 10th Jan 18 at 2:26 PM
    I retired from a banking job in the city in 2015, but was still entitled to 3 deferred bonus payments of approximately 40,000 in June of 2016, 2017 and 2018. I have received no other income in these tax years. My ex-employer has (correctly) applied a 0 tax code and weekly ni basis to these payments. This results in an excess tax deduction (which is easily reclaimed through the normal self-assessment annual return process). But the NI deduction from the payments (of approximately 900) look very low. Indeed, as I need the extra years for state pension purposes, I am being invited to "top-up" by approximately 1,200. But, am I actually liable for a much higher NI payment in these 3 years, more in line with the 4,000 or so I would have paid if the remuneration had been paid as a monthly salary? And if so, how does one go about updating the NI records?
Page 1
    • MallyGirl
    • By MallyGirl 10th Jan 18, 2:31 PM
    • 2,740 Posts
    • 7,746 Thanks
    MallyGirl
    • #2
    • 10th Jan 18, 2:31 PM
    • #2
    • 10th Jan 18, 2:31 PM
    figure seems about right. Ni is calculated for the pay period so you will have only paid 2% on most of it
    • GunJack
    • By GunJack 10th Jan 18, 2:35 PM
    • 10,174 Posts
    • 7,603 Thanks
    GunJack
    • #3
    • 10th Jan 18, 2:35 PM
    • #3
    • 10th Jan 18, 2:35 PM
    1200 per tax year, or in total for the 3 years? Have you checked your SP entitlement via gov.uk? On there is a link to show your NI record. I'd check that before contacting HMRC....
    ......Gettin' There, Wherever There is......
    • caveman8006
    • By caveman8006 10th Jan 18, 2:56 PM
    • 64 Posts
    • 8 Thanks
    caveman8006
    • #4
    • 10th Jan 18, 2:56 PM
    • #4
    • 10th Jan 18, 2:56 PM
    The top-up is only for the 16/17 year...but I assume the others will be similar.


    I find it hard to believe that NI liability can be reduced by so much just by receiving remuneration on an annual rather than monthly or weekly basis. But if you are convinced that is true, then I guess I just need to top up by the 800 or so shortfall. Seems too good to be true!
    Last edited by caveman8006; 10-01-2018 at 2:57 PM. Reason: typos
    • MallyGirl
    • By MallyGirl 10th Jan 18, 3:15 PM
    • 2,740 Posts
    • 7,746 Thanks
    MallyGirl
    • #5
    • 10th Jan 18, 3:15 PM
    • #5
    • 10th Jan 18, 3:15 PM
    NI is definitely calculated for the pay period rather than annually. I make the most of this by maxing out my salary sacrifice AVCs in a small number of months, rather than equally split through the year, as I then pay virtually no NI for those months. Every little helps!
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