Tax News

In many circumstances it can be beneficial for taxpayers to make voluntary Class 2 National Insurance Contributions (NICs) to increase their entitlement to benefits, including the State or New State Pension if they are self-employed.

Taxpayers might want to consider making voluntary NICs because:

• They are close to State Pension age and do not have enough qualifying years to get the full State Pension
• They know they will not be able to get the qualifying years they need to qualify for the full State Pension during their working life
• They are self-employed and do not have to pay Class 2 contributions because they have low profits or live outside the UK, but want to qualify for some benefits

There is also a specific list of jobs where Class 2 NICs are not payable. These are:

• examiners, moderators, invigilators and people who set exam questions
• people who run businesses involving land or property
• ministers of religion who do not receive a salary or stipend
• people who make investments for themselves or others - but not as a business and without getting a fee or commission

If you know any taxpayers that fall within any of these categories it may be beneficial to get a State Pension forecast and examine whether they should make voluntary Class 2 NICs to make up missing years.