Bargain of the year

[swill453]

I just checked my Personal Tax Account, and my voluntary class 2 (self employed) National Insurance contribution of £145.60 has now been processed and has added 2016/17 as a full year to my NI record. My "banked" pension has been ticked-up by £4.55 a week.

To buy the equivalent as an index-linked annuity would have cost me nearly £7,000.

No wonder they're being abolished. But not until 2019 I believe. Fill your boots, if appropriate.

Scott.

[MyNameIsUrl]

I'm not self-employed at the moment (or even employed), but I suppose I could become self-employed (for example by buying and selling old postcards on Ebay). Would HMRC accept my doing this for the current tax year and the next tax year, or could they refuse to accept it as simply a ruse? It seems a bit late to register as self employed for the current year in any case.

[swill453]

Well I sailed fairly close to the wind, my business being "internet trading" and my turnover pretty minimal. No questions asked (yet).

Not sure about timing for this year, though I'm fairly sure you can be self-employed without having yet been registered as such for a while at least. Say from the beginning of this tax year until now.

Scott.

[mearnsfool]

A person has to register as self employed by the beginning of October to be able to pay Class 2 NI contributions for that tax year.

Therefore it is now too late to register for the 2017 2018 tax year we are now in.

If someone registers as self employed in April 2018, they can pay class 2 NI contributions for the 2018 2019 tax year. Cost £2.95 a week, £153.40 a year somewhat cheaper than voluntary Class 3 payments at £14.65 a week, £761.80 a year.

The government has advised that Class 2 NI contributions will now be stopped at the end of the 2018 to 2019 tax year.

I believe there may well be a special allowance from the 2019 2020 tax year in the Class 4 NI contributions regime if you read between the lines in the latest government announcements. Especially women may well be disadvantaged as many women doing say tutoring will earn a few thousand a year and then need to pay £762 rather than £153 a year to keep their state pension provision up to date.

[TimR]

I'm not self-employed at the moment (or even employed)

You could immediately register unemployed online now and then get any type of PAYE job and try to earn at least £5876 to get a full year of state pension contributions (less any unemployed period credits accumulated) before the end of current tax year. You are then allowed to top your NI contributions up if they calculate any shortfall in the tax year.