Anyone know about NI contributions

[Richard C]

I realise this Forum may not be the right place to ask but one of you knowledgeable folks may know the answer & save me some time .

My wife has a part time job (2 days/week) which includes covering other staff members during their annual holiday/sick leave. Her weekly wage is normally less than the weekly amount which triggers NI contributions but when she covers for someone else, hew wages obviously increase & she ends up paying NI on that particular month’s salary even though her total annual salary divided by 52 is still somewhat less than the weekly amount when NI contributions become payable.

Are NI contributions weekly or annually based; I am unclear if should she should be paying anything at all if her total annual salary divided by 52 is less than the weekly allowance; or do they treat each week in isolation & get you anyway.

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Richard C

[Diyisfun]

You will pay both tax & ni based on what your pay packet is.
It is assumed that you earn that amount each week or month.
Income tax, will sort itself out with lower tax the following pay day or a refund at year end.
NI Dont know. but look at this
http://www.hmrc.gov.uk/nic/

This came from the above link
If I have paid too much National Insurance Contributions, how do I claim a refund?
Apply to:-

HM Revenue & Customs
National Insurance Contributions Office
Refunds Group
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

Tell them why you think you have paid too much and enclose any evidence to support your claim, e.g. pay slips and P60s.

[Richard C]

Thanks for the quick response & link; I have read it but it just seems to go on about weekly NI contributions with no reference to overall, annual contributions. I’ve got involved as I’m currently helping my wife claim her state pension & going through the process has left me wondering if her employer has been wrongly deducting NI contributions from her for the last 4 years.

She’s been having the same problem with income tax but, as you say, that gets sorted at the end of each tax year with a refund, although I’m unsure if her employer should have deducted this either based on a single months elevated earnings when they know full well that her earnings drop back well below the tax threshold afterwards. What I don’t know is weather or not NI contributions are calculated in the same way (i.e. annually) & she should be getting back what she’s paid at the end of every year; or even if you can get it back!

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Richard C

[Richard C]

Oh oh, when I read your previous post it stopped at the link; not sure what happened there

Thanks again, will have to have a deeper look into it.

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Richard C

[PE]

This link probably helps also

http://www.hmrc.gov.uk/nic/refund-nic.htm

You will have to wait until after the tax year end and until your wife has her P60 and then send a claim in to get a refund (address already supplied above) . There is a claim form application that is required CA5610 or similar I think.

The employer will base the amount of NI they deduct on each week or months pay so it is not their fault

Hope that helps

PS class 1 NI is what you require not class 2 / 4 in case you aren;t sure

[Richard C]

Thanks PE; this stuff seems to get trickier to unravel the more you get into it, there must many thousands more people in the same situation that never even realise they shouldn’t be paying let alone claim it back, the system seems totally flawed.

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Richard C

[Diyisfun]

Richard, people like you & I have to pay NI to make up for all the others that arnt.
I have taken a salary reduction to save on NI & the NI saved goes into my pension, along with the tax saving.

[Richard C]

Diyisfun wrote:

Richard, people like you & I have to pay NI to make up for all the others that arnt.

I didn’t mind paying NI when I had to but, luckily, I don’t have to anymore ; but lord knows I’ve paid enough in the past . Whilst trying to sort out the wife’s state pension for her I accidentally stumbled into this little gem. She now only works part time & earns next to nothing but I accidentally stumbled into this little gem; it looks like she's been deducted some NI every year for the last 4 years when her low annual salary meant she shouldn't have paid anything.

Diyisfun wrote:

I have taken a salary reduction to save on NI & the NI saved goes into my pension, along with the tax saving.

Neat ; I’ve either lost touch or forgotten all the little wrinkles & it’s probably all changed now anyway.

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Richard C

[MarkBarl]

If her total earnings with be under £5075 for the tax year then she would be able to claim the small earnings execption if above these, then class 2 contributions will be required @ £2.40 per week. Useful info in this pdf file