Self employed NI contributions

Jan 20, 2008 2 Replies

Hi all, I currently have a main job where I am under PAYE and pay NI contributions, and am going self employed. I`ll be earning under the ~£4.5 threshold so I don`t have to pay the £2.20 NI contributions a week, but I was wondering if there are any advantages to doing so? My main employment has me paying NI, but IIRC I`m contracted out of the secondary state pension, if that makes any sense? When I spoke to HMRC they didn`t seem to think there was a good reason for me to pay £2.20 a week when I already pay enough NI to get the benefits I may need in the future.



Any advice will be gratefully received!



Will your self-employment be alongside employment, or is your employment going to cease?

If your employment is continuing and you will still be paying NI for that, then clearly there is no point in paying class 2 contributions, because all they would buy you is qualifying years which the class 1 contributions are already buying you.

In any case, if you already have enough qualifying years for the basic state pension, there is no point either. But if you don't yet, and if your employment is ceasing, then you should pay class 2 until you clock up the number of QY you need.

Apologies for not realising that would be an important point (one of those days) :-). I`m carrying on in my main job (or moving elsewhere that`ll still be PAYE and paying NI, depending no how things go), the self employment is only for some part time work mystery shopping. Looks like I`ll be filling in the form to refuse their kind offer to take more money off me for no good reason :-)

Thanks!

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