susiejean
Jan 16 2008, 10:15 AM
Does anyone know what happens with class 2 N.I. if you don't work 52 weeks a year. Do you still have to pay it for 52 weeks a year?
Dugazon
Jan 16 2008, 12:14 PM
You have to pay Class2 NIC if you are self-employed - it doesn't matter so much if you make profit or not. If your business still exists, you will have to pay Class2 NICs, no matter if you take some time off or not. If you work as an employee again, you will change to Class 1, but if at the same time you run a business, you will still have to pay Class 2 anyway. If you have paid too much during a tax-year, you can get the money back after your self-assessment.
You pay from the day you business starts, so if you start working in July, you won't have to pay from the beginning of the tax-year (6 Apr) of course.
If your business ceases, then you can stop paying, but you will have to tell the Revenue. You can also apply for being exempt of paying any Class2 NICs if you earn under a certain amount per tax-year, but you have to keep in mind that you then won't pay any pension contributions for that time, which might affect your pension entitlement in later years. The same applies for incapacity benefit, maternity pay etc. So I would always keep the payments up, after all, it's just over 2£ a week ...