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Is a Limited company director required to pay class 2 NI?

Good day,

Please client is a director of his own company but most times does some paid jobs to make ends meet. The paid jobs are NI'ed and tax from source. As per the limited company, we have filed accounts to date. For benefit purposes HMRC is asking for evidence of class 2 NI. His he required to pay? If so what is the contact details of the government agencies to call to register for payment.

Thanks in anticipation of a quick response.

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24th Apr 2012 11:53

NIC

http://www.hmrc.gov.uk/working/intro/class2.htm

 

Everything you need is there. If he isn't technically self employed I see no reason why he should be paying Class 2's (unless he was trading on a self employed basis before incorporating the business). 

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24th Apr 2012 15:47

Quite possibly he told someone when claiming benefits that he was self-employed. It wouldn't be the first time a taxpayer fails to realise the difference between being self -employed and being the director/shareholder of a small limited company.

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By DMGbus
24th Apr 2012 19:06

Many years ago... / Sick Pay Clarification

Company directors DID used to pay Class 2 NIC many years ago (mid 1970's I think things changed to current employee / Class 1 NIC treatment).

If the director is claiming benefit because of being unable to work because of illness, then the claim (unlike a class 2 NIC payer) is via his employer (his Ltd Co) in the form of Stautory Sick Pay (SSP).

The comment that jobs done are "NI'ed and taxed from source" is unusual in a Ltd Co situation, I think the "NI'ed" part of this comment in particular needs clarification.

 

 

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25th Apr 2012 16:10

Explaining NI'ed Part

Thanks for your initial response. What I meant was that the director of the Limited Liability company most times in the year (3 months or more) take up retail jobs  as an employee of a Field Marketing Agency. He gets pain wages as a normal employee with pay slips and all. He therefore pays class 1 NI on this employment. Can this translate to his paying class 2 NI DESPITE the fact he his not self employed.

Thanks 

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26th Apr 2012 16:07

No

Basically, No. He's paid Class 1 because he's an employee. He would only pay Class 2's if he was self employed. Or, if he had ever been self employed in the past and forgotten to cancel the DD for some reason. 

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