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    • MikeFloutier
    • By MikeFloutier 15th Apr 19, 8:41 AM
    • 214Posts
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    MikeFloutier
    NIC on v. small self-employed income
    • #1
    • 15th Apr 19, 8:41 AM
    NIC on v. small self-employed income 15th Apr 19 at 8:41 AM
    Hi, my wife and I are both retired (59 & 65); we have no earned income, I have state pension and a small DB pension, she has no pension.

    We are both Christians and she has a very small income from travelling and speaking at various churches she gets invited to; mainly in Europe.

    After travelling expenses she typically nets around 1,500 each year from the offerings that she receives from these churches.

    I'm just doing her self-assessment tax return and it occurred to me that maybe she was liable for some NIC.

    Any idea whether she is?
Page 1
    • 00ec25
    • By 00ec25 15th Apr 19, 1:50 PM
    • 7,942 Posts
    • 7,655 Thanks
    00ec25
    • #2
    • 15th Apr 19, 1:50 PM
    • #2
    • 15th Apr 19, 1:50 PM
    what outcome are you looking for?

    A) does she need to pay NIC in order to get a qualifying year towards her state pension entitlement?
    or
    B) is she looking to not pay tax if she does not have to?

    The rules
    Based on what you say, she is self employed and so subject to the Class 2 and Class 4 NI rules.
    But you only pay NIC on the profits of such activity if they are above the lower profits threshold of 6,205 (18/19 rate)
    https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

    1,500 of profit is far below that threshold, so there is no way she would be compulsorily required to pay NIC

    so that leaves the question does she want to pay NIC? If yes, then she can do so as part of her tax return when she can voluntarily select the option to pay Class 2 NI as part of her tax return. It will cost her 153.50 (2.95 x 52 weeks) to buy a full year towards state pension entitlement

    Note - the above assumes she is genuinely self employed and is therefore charging for her talks. If in reality the congregations are simply making donations to her, that would be a grey area in terms of whether she is genuinely trading as a self employed speaker. If she is not self employed, but still needs to get a pension credit, she would need to pay Class 3 NI instead - that is much more expensive as it is 14.65 per week so 761.80 to buy a year of pension credit
    • MikeFloutier
    • By MikeFloutier 16th Apr 19, 9:46 AM
    • 214 Posts
    • 75 Thanks
    MikeFloutier
    • #3
    • 16th Apr 19, 9:46 AM
    • #3
    • 16th Apr 19, 9:46 AM
    Many thanks!

    It's just "B" as she has a full entitlement to State Pension; just not due until 2025

    I can now see that, in addition to the threshold for Class 4, there is also a threshold for Class 2 of just over 6,000. I'll just keep an eye on this over the coming years until 2025.

    Thanks again!
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