Class 2 National Insurance

[bunyip]

Has anyone had a bill for Class 2 NI recently?

I made a payment in July 2015 which I guess brought me up to date to April 2015. I was then expecting a bill in October, which is what I've had in previous years, but nothing arrived.

I know this is a lousy time to call HMRC with a simply query,as their waiting time goes crazy what with everyone doing their self-assessments before the deadline.

I do recall getting a letter in the summer saying they'd be changing the way Class 2 is collected: integrating it with the payment requests for income tax and Class 4 some time in the future. But there was no mention of Class 2 when I submitted my self-assessment (only income tax and Class 4.)

I'm just wondering if they mean they'll not be wanting my 2015-16 Class 2 payments until nxt January, which is the date for my 2015-16 income tax and Class 4 NI.

Can anyone enlighten me?

[k1rstie]

I'm just wondering if they mean they'll not be wanting my 2015-16 Class 2 payments until nxt January, which is the date for my 2015-16 income tax and Class 4 NI. Can anyone enlighten me?

I think it's this option.

[loocyloo]

I can't remember! I used to pay mine by a monthly direct debit, and then it changed to be collected with the tax and class 4 NI ( I think! ) I am assuming ( and we all know what that makes of you and me ) that when I next pay my tax, a portion of it will be class 2, or they'll lump it all together into one generic NI payment.

[FloraDora]

I was billed in July for NI2 I knew that I would not be earning enough to pay it so didn't pay, had another letter that said it needed paying by January 2016. I submitted my 2014/15 tax form in September and was not charged for NI2 as didn't earn enough. From this I assume it is part of the submitting the form then being told what you owe in tax and NI2&4. I have since had a summary online that states all I owe is £1.60 ( have losses from last year that is offsetting tax this year)
I have already paid 44 years of NI so am happy not to pay any more, paid enough for my soon to be pension and have other income I pay tax on that will cover sickness leave etc....

[natlou82]

I am in the same situation as you Bunyip and I also remember hearing the way in which we pay is changing. I submitted 2015/2016 in April and only paid additional class 4. I'm assuming that I will be now billed for class 2 and 4 on my 2016/2017 tax bill. I am interested to hear others thoughts.

[natlou82]

Sorry I've got my years in a tizzy there I meant in April I submitted 14/15 and I'm expecting my bill for my 15/16 return - hope that all makes sense :-)

[Simona]

Buyip...in July most of us will have paid the last instalment of NI for the current year
From next year...from April 2016 that is... NI contributions will be collected when we do our annual Tax return

I received notification from HMRC and contacted my accountant for clarification and was told yes that is the way we will pay in future...it saves HMRC money.
Hope this helps.

[bunyip]

Thanks for the replies.

Interesting to hear from an accountant that the HMRC saves money by letting us pay them several months later than previously. I guess it cuts down on their admin work, but only the topsy-turvy logic of HMRC could see a benefit in being paid late ! :D

[hectors house]

I submitted my tax return in October and didn't earn enough to pay tax, so didn't have to pay any Class 2 or 4 national insurance, but bit worried that this will affect my pension (I'm 51), I may go on the Pension website and see if I can make voluntary contributions but no idea whether this needs to be class 2 or class 4?

[Simona]

Thanks for the replies.

Interesting to hear from an accountant that the HMRC saves money by letting us pay them several months later than previously. I guess it cuts down on their admin work, but only the topsy-turvy logic of HMRC could see a benefit in being paid late ! :D

Bunyip...I believe it is the blessed cuts that have cut the HMRC budget so this seems to me an easy way of paying and collecting NI in one go rather than manage millions of Direct Debits each month plus sending the annual information on what will be collected and when?
All we have to do is put a little amount away each month in a savings account and it will be saved by the time we submit the Tax return...a bit like saving for our taxes

HH...I am not very sure but if you are self employed you should pay NI regardless towards your pension contributions...please check it out to be sure

Considering the mess the govt has made with women's pensions for those born in the 50s I would recommend you have the required number of years in contributions
Hope this helps

[bunyip]

Bunyip...I believe it is the blessed cuts that have cut the HMRC budget so this seems to me an easy way of paying and collecting NI in one go rather than manage millions of Direct Debits each month plus sending the annual information on what will be collected and when?
All we have to do is put a little amount away each month in a savings account and it will be saved by the time we submit the Tax return...a bit like saving for our taxes

HH...I am not very sure but if you are self employed you should pay NI regardless towards your pension contributions...please check it out to be sure

Considering the mess the govt has made with women's pensions for those born in the 50s I would recommend you have the required number of years in contributions
Hope this helps

Agreed.

I've not checked it out myself, but I understand there is now a pension calculator to help check if you are on track to have enough contributions to qualify. That said, nobody is guaranteed a pension until they get it: governments have a way of moving goalposts, abolit=shing all sorts of things and even companies can plunder pension funds if they are maintains on account as company assets. :p

For now, I'm just hoping HMRC's cuts don't extend to removing that handy little monthly income tax guess-ometer: my only way of knowing roughly how much to put by for tax before I set off to convert my remaining earnings into ale. ;)

[Simona]

Agreed.

I've not checked it out myself, but I understand there is now a pension calculator to help check if you are on track to have enough contributions to qualify. That said, nobody is guaranteed a pension until they get it: governments have a way of moving goalposts, abolit=shing all sorts of things and even companies can plunder pension funds if they are maintains on account as company assets. :p

For now, I'm just hoping HMRC's cuts don't extend to removing that handy little monthly income tax guess-ometer: my only way of knowing roughly how much to put by for tax before I set off to convert my remaining earnings into ale. ;)

One way of knowing Buynip is to ask the DWP to send you a Pension Forecast....I requested mine and it arrived a few months later...staff cuts so it took a long time!
Young people need to start a private pension

You need 10 years NI contribution I think but many have got more than that and yes it looks like this govt will tinker with pensions as they like and we get less and less...I am on the receiving end unfortunately

I am sure HMRC will tell us what we need to put by for NI on their website maybe...will check it out
Tax remains the same at 20% after the allowance which is now £10,600 so based on Tax code 1060L
Hope that leaves you enough for your ale and me a bottle of Chianti!

[hectors house]

Bunyip...I believe it is the blessed cuts that have cut the HMRC budget so this seems to me an easy way of paying and collecting NI in one go rather than manage millions of Direct Debits each month plus sending the annual information on what will be collected and when?
All we have to do is put a little amount away each month in a savings account and it will be saved by the time we submit the Tax return...a bit like saving for our taxes

HH...I am not very sure but if you are self employed you should pay NI regardless towards your pension contributions...please check it out to be sure

Considering the mess the govt has made with women's pensions for those born in the 50s I would recommend you have the required number of years in contributions
Hope this helps

That's what I'm worried about - when I childminded previously when my own children were small I was exempt from paying NI as I didn't earn enough - so I had a gap of 9 or more years, I had previously when I was working opted out of SERPS so my opted out pension didn't get any contributions during that time, I should have opted back in apparently.

[Simona]

That's what I'm worried about - when *****minded previously when my own children were small I was exempt from paying NI as I didn't earn enough - so I had a gap of 9 or more years, I had previously when I was working opted out of SERPS so my opted out pension didn't get any contributions during that time, I should have opted back in apparently.

Your NI contributions do not have to be made in consequent months....so I understand there can be a gap....as long as they add up to the required amount.
If you call the DWP they will explain it to you very well and you can then rectify anything.

I found them helpful
If you request a Pension Forecast that will have everything you have paid listed...it really helps to find out about your state pension
This is their number
0345 300 0168

[It's a small world]

I'm confused (doesn't take much) I used to pay NI by direct debit then got the letter about changing payments. Nothing since apart from amount noted on tax return £25 which I guess is down to what I earnt? I'm scared im going to get a bill for over £100 which I won't be able to afford!!! why change the direct debit so much easier! X

[natlou82]

All collected in tax return now, if you go on HMRC you can do a ready reckoner where you fill in your weekly / monthly profit and they calculate how much you should put away to cover tax and NI. Useful tool :-)

[Simona]

I'm confused (doesn't take much) I used to pay NI by direct debit then got the letter about changing payments. Nothing since apart from amount noted on tax return £25 which I guess is down to what I earnt? I'm scared im going to get a bill for over £100 which I won't be able to afford!!! why change the direct debit so much easier! X

yes it is a pity that the system has changed
We have discussed it here for a while and I recall saying I received a letter from HMRC to inform the changes in collecting NI
All cms need to look into it and get ready

It is a bit inconvenient but everyone is being affected as it obviously saves money to collect NI in one go under your Tax Return than collect it monthly by millions of DD.

You will need to save your monthly NI contribution rather than pay in a DD...I thinki it is doable once we know what the new NI amount is
Check the website to keep informed.

[natlou82]

I was on a HMRC Webinar last night and they said £2.80 per week class 2. They also said class 4 lower profit limit is £8060 for yr 15/16 Proust above that would require a payment of 9%

[It's a small world]

On my letter it said you can do a budget plan and put so much away
. I might look at that x

[Simona]

Current rate for 2015/2016 is £2.80 as per link...not sure what it will be from April 2016...will keep eyes open

National Insurance for the self-employed « TaxAid (http://taxaid.org.uk/guides/information/an-introduction-to-income-tax-national-insurance-and-tax-credits/national-insurance/national-insurance-for-the-self-employed)

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/331758/tiin-class2-nic.pdf