It’s no surprise that HMRC seems to be collecting every last penny in tax and national insurance contributions (NIC) from all possible sources. HMRC have recently been demanding class 2 NIC payments from landlords and investors in property partnerships. If you receive a back-dated bill for class 2 NICs, should you pay it?
The yearly NI (class 2) liability is quite a small amount at £143 for 2014/15, but it can offer an entitlement to the UK state pension. After 5 April 2016, you’ll need at least ten full years of NI contributions before being eligible for any state pension once you reach the state pension age (SPA). Please note that SPA is being gradually increased from age 65, so If you’re currently under the age of 54, you won’t be entitled to your state pension until you’re at least 67.
If your main source of income is through rent and/or investments, then paying class 2 NICs for previous tax years may give you some state pension entitlement. If your main income is through employment, you’re more than likely paying enough class 1 NICs each tax year to gain your entitlement.
If you’re unsure about anything, we can help you decide what would be the most beneficial for you – just give us a call on 01782 279615.