Top-up NICs years

[David Helms]

I have a somewhat moribund limited company. I need to make several more years of NICs contributions to be eligible for the full state pension.

Question: would it be legitimate to accept investments in the company (probably from my wife) and use these to pay me a salary and pay the appropriate NICs?

Q2: would it be sensible? I have no idea what anyone, HMRC included, would think of the resulting balance sheet.

[BR14]

I have a somewhat moribund limited company. I need to make several more years of NICs contributions to be eligible for the full state pension.

Question: would it be legitimate to accept investments in the company (probably from my wife) and use these to pay me a salary and pay the appropriate NICs?

Q2: would it be sensible? I have no idea what anyone, HMRC included, would think of the resulting balance sheet.

Have you read this?
https://www.taxation.co.uk/Articles/...334190/topping

I googled it for you, you needn't thank me

[washed up contractor]

I have a somewhat moribund limited company. I need to make several more years of NICs contributions to be eligible for the full state pension.

Question: would it be legitimate to accept investments in the company (probably from my wife) and use these to pay me a salary and pay the appropriate NICs?

Q2: would it be sensible? I have no idea what anyone, HMRC included, would think of the resulting balance sheet.

Presumably you will not have hit retirement yet. If so, you can only go back 6 years to make up any shortfall.

I see no benefit of your wife investing money in your co to pay your NICs when she could just give you the money and you do it as a private individual.

This is a good guide regarding topping up your state pension especially the flow chart on page 6.

https://www.royallondon.com/Global/d...SION-GUIDE.pdf

[Lance]

I have a somewhat moribund limited company. I need to make several more years of NICs contributions to be eligible for the full state pension.

Question: would it be legitimate to accept investments in the company (probably from my wife) and use these to pay me a salary and pay the appropriate NICs?

Yes

Q2: would it be sensible?

No

[drumtochty]

David as usual in peoples state pension posting they have not done or posted enough info to allow others to help them so I will give you some jobs to do.

We need your age and DOB as you can only buy future NI contribution until the April 5 before your state pension starting date.

If you are below 65 now you cannot buy class 3A NI contributions that BR linked to as they were only for people who were 65 before April 6 2016.

Therefore the first thing we need is a state pension forecast which will give you the following data.

Your forecast pension earned today and your state pension forecast at 65 if you continue to pay Ni contributions.

If you are getting less than £159.55 with what you have earned today what is the best way to get that up to £159.55.

If you are already above £159.55 you cannot add to that only inflation increases that everyone gets will increase that figure.

If your forecast amount at 6 April 2016 is less than £119.30 it may be worth paying for NI contributions before that date. If it is above that and most people will be above that, buying pre 2016 voluntary contributions will not increase your pension.

Therefore either look at your personal tax account to find your forecast and gaps in your NI record.

https://www.gov.uk/personal-tax-account

Or if that is not the way you want to go, phone the Future Pensions Centre on 0345 3000 169 and request a pension forecast.

You will need your NI number and your DOB when you talk to the call handler.

Do not ask the person on the phone for any other advice as nothing can be done until the forecast is produced, further when that is produced, it is not the call handler that can advise on the best use of buying voluntary NI years. That request after you receive your forecast is then sent up the line by the call handlers and you are phoned some weeks after you request that data after the forecast arrives and a more senior person who has looked at your case in detail will talk you through the best way forward.

This is due to the recent case where people bought previous years NI contributions but got no pension increase and the DWP got bad press in the personal financial papers.

If you already have a forecast post the details and your DOB and I will try to give you a quick steer as to roughly what to do but that has to be confirmed by the DWP.

Are you still working?

[drumtochty]

With regards to you second question.

It would be fraud to go through the motions with your limited company and invoice £6k and pay yourself £6k if there was no work done.

If on the other hand there was work done paying yourself £6k would get you a years NI contribution, then you do not need to pay NI as it assumed to be paid.

In that case if you are living of say a personal pension and you are paying yoursefd a taxable £12k a year the next £6k would be taxed at £1,200 if you are a basic rate tax payer or reduce your pension payment by £6k a year. If you use an accountant to do your books what is that annual cost which has to be added.

For the 18 19 tax year you could register as self employed in April with HMRC, run a business like dog walking and earn say £100 or £ 200 a year. Then in April 2019 do your self assessment tax return, add the self employed page and agree to pay class 2 contributions on that sheet.

That will cost circa £150 a year and add 1 year of NI.

Third option is Class 3 voluntary contributions at £730 a year approx.

I'm of the opinion you cannot pay Class 2 NI for 2016 2017 and 2017 2018 if you are not registered as self employed with HMRC but that is for you to ask the DWP.

The Treasury secretary has recently suggested that something similar to the existing Class 2 NI scheme may well be brought in after the 2018 2019 tax year but that will not be known about until the November Autumn statement.