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How do I Pay My Own National Insurance Contributions?
The Wizard
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I've been out of work for just over 3 months and my Jobseekers allowance has been stopped because your only allowed to claim for so long before it goes onto income based JSA. As my partner works full time they said I'm not entitled to it anymore but I can get my NI stamp paid, by continuing to sign on.
However, I thought it may be better, depending on how much it would cost, to pay my own contributions in order to get the jobcentre off my back so I don't have to rely on them for anything and if I decide to do a few hours bar work here and there, cash in hand then it won't matter.
Basically what i'm saying is, I want to be self sufficient and please myself but the pub pays cash in hand which is why they can't pay my NI. If I claim NI contributions off the Jobcentre then I will have to declare my part time job and they'll stop my claim so I won't be any better off. At least by paying my own NI contributions i'll have the freedom to take on as much or as little work as I want without having to answer to the Jobcentre every fortnight and attending interviews.
However, I thought it may be better, depending on how much it would cost, to pay my own contributions in order to get the jobcentre off my back so I don't have to rely on them for anything and if I decide to do a few hours bar work here and there, cash in hand then it won't matter.
Basically what i'm saying is, I want to be self sufficient and please myself but the pub pays cash in hand which is why they can't pay my NI. If I claim NI contributions off the Jobcentre then I will have to declare my part time job and they'll stop my claim so I won't be any better off. At least by paying my own NI contributions i'll have the freedom to take on as much or as little work as I want without having to answer to the Jobcentre every fortnight and attending interviews.
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Any part-time work you do can be taxed as PAYE by the employer as normal, but it also means that you can pay your class 2 NICs (£2.40 per week) yourself. Remember, any work you do that isn't taxed as source should be declared for income tax and Class 4 NICs when you complete your tax return each April.
You'll get details here:
http://www.hmrc.gov.uk/faqs/vol-conts.htm#3
and here
http://www.hmrc.gov.uk/rates/nic.htm
But why would you want to pay class 3 contributions if you are already paying class 1 or 2 ?
If you register as self-employed, you automatically will be invoices for the Class 2 contributions, every 4 months.
As I won't be earning over £95 a week I've been told I don't need to pay tax cos the threshhold is about £100 a week. I'm hoping to do about 3 or 4 days a week part time which will earn me about £92 a week. If the manager doesn't pay my stamp and I don't pay my own then i'll have a short fall. Yet if I sign on and get the Jobcentre to pay it for me then by law I have to be seeking work. Because I'll already have a part time job at the pub, this means I won't be eligible.
And yes, any paid work, if it's below the threshold, won't attract class 1 NICs or tax.
So you could put money aside, and then pay it off when you get the letter?
What are they? Submitting a tax return, that will have to be done anyway if the op is not employed or signing on as unemployed.
If you're just registering as self-employed to keep up your NIC payments, your self-employed pages will be zero income, zero outgings, zero taxable profit.
Next comes your employed earnings, and if you've been employed at any point during the tax year, the company (or companies you've worked for) will provide you with P60s detailing your gross pay, tax and NI deducted, and you simply put these figures into the boxes supplied and send the tax return back.
You can even do it online and it'll tell you immediately if you've got to pay any tax, or even due a tax refund.
if he then finds normal employment he'll still be stuffed with filling out a tax return and his 'cash-in-hand' work may then become taxable retrospectively if he earns over the threshold (which if he finds a job is likely). and try telling HMRC you no longer need to file a tax return! once your on that list, it's hard to get off.
But if the employer issues me a P60 that would mean he's already set up to pay my tax and NI wouldn't it? The point is, this is a small back street pub which doesn't operate PAYE. Basically he pays everyone cash and puts it down on his books as ' staff wages'. But I want to make sure my contributions are up to date. I already know that I won't need to pay tax as my earnings won't be enough. Would he still need to issue a P60 even tho i'm not paying tax? Surely I'll need to find some way of declaring it to make sure i'm legal.
At the end of the day it's casual bar work and it may even end up being a 'needed as and when' basis and not regular hours.
Unless the publican is just going to give you cash in hand, no questions asked, you should be aware of the following advice to employers from the Inland Revenue wed site:
The term ‘employment status’ refers to whether a worker is employed or self-employed. This affects the tax and NICs that are due on their earnings. So if you don’t get it right, you could end up having to pay extra tax, NICs, interest and possible penalties later.
If you take a worker on, then you’re responsible for determining their employment status - this applies for all workers, whether they're full-time, part-time, permanent, temporary or casual.
Employment status isn’t a matter of choice for either you or your workers. It’s a matter of fact, based on key terms and conditions of your working relationship with them -
In most cases, employment status is straightforward. As a general rule, a worker is:
* employed if they work for you and don’t have the risks of running a business.
* self-employed if they’re in business on their own account and are responsible for the success or failure of their business
When I first became self employed I had many weeks when I had no work (or income) so took on a variety of odd bits of work: cleaner, barman, courier. None of the companies would pay me untaxed, even if it was just a day. I just had it taken and sorted it out when I submitted my tax return as I knew (or at least hoped) that I would have a taxable income by the time it came to do the return. If you don't expect to,must sort out a tax code at your local ofice. They'll also give you details for setting up a DD to pay your class 2 NI every month which is currently the equivalent of £2.40 a week. If you decide not to register as self-employed but instead offer to pay the voluntary class 3 contribution that is £12.05 a week. You'd still have to complete a tax return though.