Digital Spy

Search Digital Spy
 

DS Forums

 
 

How do I Pay My Own National Insurance Contributions?


Reply
Thread Tools Search this Thread
Old 02-09-2009, 12:46
The Wizard
Forum Member
 
Join Date: Jul 2007
Posts: 8,434

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.
The Wizard is offline   Reply With Quote
Please sign in or register to remove this advertisement.
Old 02-09-2009, 13:30
tellytart1
Forum Member
 
Join Date: Sep 2003
Location: London
Posts: 3,636
Call your tax office and register as self-employed.

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.
tellytart1 is offline   Reply With Quote
Old 02-09-2009, 13:44
Pandora Black
Forum Member
 
Join Date: Dec 2007
Posts: 1,449
I got a letter at the end of one financial year, saying I had missed out on x amount of payments to make my NI payments into a full year, and did I want to pay the extra to make it a full year. Or something like that.
Pandora Black is offline   Reply With Quote
Old 02-09-2009, 14:05
geoveo
Forum Member
 
Join Date: Nov 2008
Location: On the move
Posts: 732
If you register as self-employed you'll be able to pay the class 2 rate of £2.40 per week. If however you pay the voluntary contribution to complete or avoid gaps in your contributions you'll have to pay the class 3 rate of £12.05 per week.

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
geoveo is offline   Reply With Quote
Old 02-09-2009, 14:11
tellytart1
Forum Member
 
Join Date: Sep 2003
Location: London
Posts: 3,636
But if you're employed for a period (paying class 1) or you register as self-employed (paying class 2) you CANNOT also pay class 3 contributions, you pay either class 1 or 2 and/or 4, or you pay class 3.
tellytart1 is offline   Reply With Quote
Old 02-09-2009, 14:19
geoveo
Forum Member
 
Join Date: Nov 2008
Location: On the move
Posts: 732
But if you're employed for a period (paying class 1) or you register as self-employed (paying class 2) you CANNOT also pay class 3 contributions, you pay either class 1 or 2 and/or 4, or you pay class 3.
But why would you want to pay class 3 contributions if you are already paying class 1 or 2 ?
geoveo is offline   Reply With Quote
Old 02-09-2009, 14:32
Miles Teg
Inactive Member
 
Join Date: Jul 2008
Posts: 188
Call your tax office and register as self-employed.

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.
top class advice
Miles Teg is offline   Reply With Quote
Old 02-09-2009, 14:33
tellytart1
Forum Member
 
Join Date: Sep 2003
Location: London
Posts: 3,636
Precisely, you pay class 3 voluntarily if you're not paying class 1 or 2.

If you register as self-employed, you automatically will be invoices for the Class 2 contributions, every 4 months.
tellytart1 is offline   Reply With Quote
Old 02-09-2009, 14:44
The Wizard
Forum Member
 
Join Date: Jul 2007
Posts: 8,434
I'm not sure what class contributions I need to pay. If I work in my local pub I won't be self employed. I just want to cover the gap so I don't have a short fall in my contributions. So is that class 1?

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.
The Wizard is offline   Reply With Quote
Old 02-09-2009, 14:47
tellytart1
Forum Member
 
Join Date: Sep 2003
Location: London
Posts: 3,636
Sounds like you'd be best registering as self-employed, that way you pay the Class 2 contributions and ensure that you keep continuity of your NI payments.

And yes, any paid work, if it's below the threshold, won't attract class 1 NICs or tax.
tellytart1 is offline   Reply With Quote
Old 02-09-2009, 14:52
Keefy-boy
Forum Member
 
Join Date: Oct 2006
Location: Brighton, UK
Posts: 8,377
Sounds like you'd be best registering as self-employed.
the ongoing compliance complications of doing that when he's not actually self-employed make that a very daft idea IMO.
Keefy-boy is offline   Reply With Quote
Old 02-09-2009, 14:57
Sulriss
 
Posts: n/a
You normally get a letter if you haven't paid enough national insurance for the end of every tax year don't you? You have the option of making up the shortfall if you wish to.

So you could put money aside, and then pay it off when you get the letter?
  Reply With Quote
Old 02-09-2009, 14:58
geoveo
Forum Member
 
Join Date: Nov 2008
Location: On the move
Posts: 732
the ongoing compliance complications of doing that when he's not actually self-employed make that a very daft idea IMO.
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.
geoveo is offline   Reply With Quote
Old 02-09-2009, 15:01
tellytart1
Forum Member
 
Join Date: Sep 2003
Location: London
Posts: 3,636
Contrary to popular belief, doing a tax return is very very simple, and there are plenty of guides from the HMRC website if you do get stuck.

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.
tellytart1 is offline   Reply With Quote
Old 02-09-2009, 15:09
The Wizard
Forum Member
 
Join Date: Jul 2007
Posts: 8,434
If I registered as being self employed i'd have to be tax registered and submit an invoice for my services to my employer which he will have to put through his books and I will have to do end of year tax returns and it might end up quite complicated just for a few hours bar work. I can't see him wanting to go to all that bother for me. I'd rather find a way of paying my own class 1 contributions on a regular standing order or something so every week or month it gets paid and out the way. Although i'm not sure if it's a set amount or a percentage of what you earn.
The Wizard is offline   Reply With Quote
Old 02-09-2009, 15:13
Keefy-boy
Forum Member
 
Join Date: Oct 2006
Location: Brighton, UK
Posts: 8,377
Contrary to popular belief, doing a tax return is very very simple
it's not something that you'd want to do if you don't have to. not only will he have to fill in a tax return, if he wants to be totally above board he's going to need to start keeping records of all his 'cash in hand' work if he registers as self-employed.

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.
Keefy-boy is offline   Reply With Quote
Old 02-09-2009, 15:14
tellytart1
Forum Member
 
Join Date: Sep 2003
Location: London
Posts: 3,636
No, you wouldn't. While being self-employed, you can still work for an employer as a normal employee. You don't even need to tell them you're self-employed. It just make it easier for you to ensure your NICs are kept up to date.
tellytart1 is offline   Reply With Quote
Old 02-09-2009, 15:20
The Wizard
Forum Member
 
Join Date: Jul 2007
Posts: 8,434
Contrary to popular belief, doing a tax return is very very simple, and there are plenty of guides from the HMRC website if you do get stuck.

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.
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.
The Wizard is offline   Reply With Quote
Old 02-09-2009, 15:24
geoveo
Forum Member
 
Join Date: Nov 2008
Location: On the move
Posts: 732
When it comes to submitting a tax return you just get additional pages for any tax deducted work you have undertaken.
geoveo is offline   Reply With Quote
Old 02-09-2009, 17:02
v0id
Forum Member
 
Join Date: Jan 2006
Location: UK | W-Ton
Posts: 933
Any 'legal' work you get, the employer would have to pay you NI and tax anyway, otherwise they could face a hefty fine :/
v0id is offline   Reply With Quote
Old 02-09-2009, 17:43
geoveo
Forum Member
 
Join Date: Nov 2008
Location: On the move
Posts: 732
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 Ďemployment statusí 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 donít 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 youíre responsible for determining their employment status - this applies for all workers, whether they're full-time, part-time, permanent, temporary or casual.

Employment status isnít a matter of choice for either you or your workers. Itís 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 donít have the risks of running a business.

* self-employed if theyíre 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.
geoveo is offline   Reply With Quote
 
Reply



Thread Tools Search this Thread
Search this Thread:

Advanced Search

 
Forum Jump


All times are GMT +1. The time now is 17:48.