In past years my clients with low earnings have been able to pay Class 2 NIC contributions and earned qualifying years towards state benefits, (most importantly State Pension). As I understand it, by paying Class 2 NICs they have qualified for virtually the same range as benefits as anyone paying Class 1 NIC contributions.
Class 2 NICs are levied at a flat rate of just £2.80 per week. This represents a bargain compared to voluntary Class 3 NICs which are levied at £14.10 per week.
Clients used to pay directly every thirteen weeks but, as you know, now HMRC has taken over the responsibility for their collection.
When submitting their 2015-2016 tax returns many of my clients have expressed their wish to pay HMRC the Class 2 NICs - £145.60 per annum - to earn a qualifying year.
In some cases HMRC have now begun to write back to me suggesting that the liability for £145.60p need not be paid and have sent me their (HMRC's) alternative calculation, eliminating the Class 2 NIC liability.
My concern is that if my clients accept the HMRC amended calculation they will not earn a qualifying year towards State Pension. Am I right to be worried, please?