taxes - National Insurance... eh?

[izzi81]

I just got a letter from the Inland Revenue this morning saying I apparently owe them £681 in back payment for NI contributions. Well, not 'owe', apparently I don't *have* to pay?

The fact that only now are they telling me about this (dating back to 1997) is one grumble, the other is that I owe this money at all!

The times they list are, I suspect, times I wasn't working. Which has happened fairly often as I've never had a constant job, more like the occasional part time shop job. So this appears to be a letter asking for money for all the times I had no money coming in?? How am I supposed to pay that? I wasn't registered unemployed.. if I had been would this have been paid by them? I didn't register because I didn't want to take money for nothing, is this now a penalty for doing that?

I don't understand... the only thing I do know is that I can't afford to pay £681. No job = *no money*, stupid goverment....

Can anyone explain this to me?
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[tgabber]

You must have paid a certain level of NI contributions by the time you retire to claim a full pension. NI contributions also effect certain types of unemployment benefit.

It sounds like the revenue believe your contributions have fallen behind so are suggesting that you might like to top them up.

Several factors can effect your decision.

Depending on what you were doing during the periods they refer to there are various allowances you may be able to claim.

If you believe that you will pay enough contributions through future work before you are 60 you could ignore this.

The revenue may have made a mistake (actually happens quite a lot).

(If you think our system of government will have collapsed by the time you retire you might not want to pay... )

There is some more general info at:

https://www.adviceguide.org.uk/index/life/benefits/national_insurance_contributions_and_contributory_benefits.htm

Being serious, it really is quite complex and only by getting professional advice about your individual circumstances can you be sure what the right thing to do is.

Myself, I'm planning to have made my fortune by the time I retire so I don't have to worry about a pension!
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[izzi81]

I was going to look and see if they have made a mistake, I know it's quite possible, but there have been quite long spells where I didn't work so even if I don't owe them *all* that I will certainly owe them quite a bit. I doubt there will be much in the way of allowances, I wasn't working and I wasn't claiming any benefits either...

If 'owe' is the right word.. I've never been very sure about the whole 'state pension' idea anyway! And I do believe that one day in the near future I will have a job that will be constant and pay me money, I just don't have it right now lol.

I'll have a look at that site, but it looks like for now I'm not going to be sending them any money....

thanks for all the info
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"The problem with the French is they have no word for 'entrepreneur' " George W Bush
Age doesn't matter unless you're a cheese
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[Major_Grooves]

Hold on a minute.

I think I got the same letter as did my g/f. They are asking for NI contributions for me from 1997 when I was at uni. I think they have noticed that I have not made full contributions for each each year when I worked p/t so they don't count as a full year towards the state pension. They then tell me that to make up the years I have to pay £X.

BUT, I'm sure they say that the payment is voluntary. I only need to make the payment if I want to claim these years later on, and, I have 5 years to make the payment.

So check your letter again - I am pretty sure it will say somewhere that it is a voluntary payment.

HTH
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[Sadie]

For future reference, had you claimed some kind of state benefit while you were out of work, your NI would have been paid out of that before you received it.
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With experience comes age.

[Jammy-G]

Mum got the same letter. JUNK!
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[izzi81]

[yambabe]

Having worked for the Revenue, i can tell you that these letters are sent out on a rgular basis, and they are NOT a demand for payment.

They are basically advising you that according to their records you have not made the minimum NI payments in that year to make it a "qualifying" year for pension purposes.

This doesn't mean that you will not qualify for a state pension, but it does mean that if you do not have the full amount of years in when it comes time to claim your pension it may be reduced.

If you contact the DWP (Dept for Work & Pensions) they will send you, for free, a calculation as to what pension you can expect to receive based on your current contributions. This can be scary reading!

If you don't have the sort of money they are asking for and you are still fairly young, don't worry about it. If you are within 15 years of retirement age it is probably worth talking to them about making "top-up" NI payments, possibly of small weekly/monthly amounts rather than a lump sum.
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[izzi81]

[yambabe]

I'm not sure if the same rules apply, as I left the Revenue over 5 years ago, but it used to be the case that (as Sadie said before), if you are out of work & claiming benefits then you usually get an NI "credit" that counts towards your qualifying years.

If you weren't claiming anything, but did not work due to childcare or other full-time caring commitments you used to be able to get a "credit" for this too but you had to apply for it, it didn't happen automatically.

If you were not working and not claiming benefits, it shows as a gap in your NI record.

The best place to go for info is the DWP website, which I think is at www.dwp.gov.uk
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Sod falling in love, I wanna fall in chocolate.