Buried in a handout for a self-employment course I was doing the other day was the statement, “it is important to register as unemployed as soon as you can even if you intend to start a business. This ensures that your National Insurance contributions are credited from the appropriate date.” Really? This was the first I’d heard about it. It sounded like an important thing to do. I was wondering why I hadn’t come across this before on the list of things to do when made redundant. As a high rate tax payer, I assumed there was no point rushing down the JobCentre Plus as I would not be entitled to any help in the current tax year. Should I?
I know little about UK National Insurance. The synopsis is that if you are employed, your employer pays National Insurance (NI) contributions for you. If you have paid NI in the tax year, the year counts as a Qualifying Year. If, on retirement, you have enough Qualifying Years, you get a State Pension. If you don’t have enough years, then you don’t. The bottom line is that you don’t want to start missing Qualifying Years.
Do I need to do anything? As I understand it you can get NI credits if you are unemployed and getting JobSeekers Allowance. This is the thing that I don’t think I would get anyway. Also if you have a Missing Year, you can “buy” it back up to 6 years back.
So how do you know if you have any Missing Years or if the 2016-17 Tax Year is not going to be a Qualifying Year? Well, you can check your NI record online. It does not show the prior tax year as yet. I have 21 years of contributions up to 2014-15. 2015-16 should also be a Qualifying Year as I was employed. I discovered I have 3 missing years back when I was a student at University. If I’d known I might have tried to “buy” those back.
So back to 2016-17 and do I need to do anything now?
Ok, so that’s good. I should also make a note to check the NI record at the end of 2017. But if it’s going to be short it would be best to apply for NI credits now I assume?
Ok, that’s interesting. But what about this?:
That’s slightly confusing. What does the Government say?
“In a qualifying year, you have a National Insurance record if you a) worked and paid National Insurance contributions or b) received National Insurance credits due to unemployment, sickness or as a parent or carer or c) paid voluntary National Insurance contributions”
But how do I know if I’ve paid enough? How much do you have to pay?
“If you’re employed, you pay Class 1 National Insurance contributions.The rates for most people for the 2016 to 2017 tax year are:“
|Your pay||Class 1 National Insurance rate|
|£155 to £827 a week (£672 to £3,583 a month)||12%|
|Over £827 a week (£3,583 a month)||2%|
- Check NI contributions on P45 when it appears to confirm I have paid some.
- Check Qualifying Years for 2016/17 at end of 2017?