State Pension Entitlement

28th January 2017

Voluntary Payment of Class 2 NIC by Self-Employed: Protect your state pension ?
Self-employed individuals and Partners in trading Partnerships now pay class 2 national insurance contributions annually on 31st January following the end of the tax year through their Self-Assessment Return. Prior to 5th April 2015 those on low incomes had to pay Class 2 NIC’s unless they had applied for and been granted in advance a certificate of small earnings exception. From 2015/16 Class 2 NIC is only payable if profits exceed the small earnings threshold (currently £5,965). This relief is given automatically unless a claim is made to pay Class 2 NIC’s voluntarily.

In many instances it can be worth paying voluntarily Class 2 NIC’s (which for 2015/16 amount to £145.60 for the year) in order to protect entitlement to contributory state benefits, particularly the state pension. Self-employed taxpayers on low incomes or those with losses in a particular year should therefore not automatically take advantage of the small earnings relief without ensuring that consideration has been given to their current and future state benefits position.



 
Other items in Blogs
 
Bethan Hassey
24th September 2021 SSP Rebate Scheme closes 30 September 2021!

Normal Statutory Sick Pay (SSP) can be paid to your employees from the fourth day they are absent from work if they meet the following criteria: They are classed as an employee and have done some work for you Earn an average of at least £120 per week Have been ill for at least 4…

Read More »

Stephen Malkin
23rd September 2021 BREAKING NEWS – MTD Delay

Making tax digital for income tax is being delayed, originally due to come in from 6 April 2023 this has now been delayed until 6 April 2024 for individuals and landlords.  General partnerships have been delayed further until 6 April 2025.   The government has said  that it recognises the challenges faced by many UK…

Read More »

Ian Piper
22nd September 2021 Net Zero Carbon: Does your business now need a plan?

From 1 October 2021, to be eligible to apply for public sector contracts over £5m pa, suppliers must have Net Zero Carbon Reduction Plans in place. These will be required to demonstrate a commitment to achieving Net Zero by 2050 in the UK:  Taking Account of Carbon Reduction Plans in the Procurement of Major Government…

Read More »

Steven Denton
15th September 2021 The Health & Social Care Levy

On the face of things perhaps no big deal, but in a society that has traditionally seen very small changes to the tax & NI system a 10% rise in one fell swoop is not one to be casually shrugged off.   Assuming current NI banding remains unchanged in the 2022-23 tax year, the budget…

Read More »

Millie Hunt
15th September 2021 Changes to the leisure & hospitality VAT rate

To encourage spending in the leisure & tourism sector, the VAT rate for certain supplies was cut from 20% to 5% in July 2020. From 1 October 2021, the VAT rate will rise again to 12.5% and this rate will be in place until 31 March 2022.   If your business operates in the leisure…

Read More »

Luke Bacon
14th September 2021 End of SDLT Holiday

Back in July 2020, The Government launched the so-called Stamp Duty Holiday for residential properties, as part of a strategy to give the UK property market a much-needed boost during the Covid 19 pandemic. Stamp Duty Land Tax (SDLT) is payable on purchases of UK property. The amount of consideration which is exempt from SDLT…

Read More »