Class 2 and SE commencing mid year

Do you need to pay Class 3 to plug the gap?

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Hi all

So if a client commences in SE after 06/04/19, do they have to pay Class 3 for however many weeks they weren't SE in the tax year?  As in, if they commenced 13/04/19, would they be able to make voluntary Class 2 for 51 weeks but all for naught unless they also make a single Class 3 payment for 06/04/19 - 12/04/19?

Thanks all

Replies (9)

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By Paul Crowley
28th Jan 2021 11:07

Make life easy
Start the self employment on 6 April

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Replying to Paul Crowley:
Quack
By Constantly Confused
28th Jan 2021 11:59

Paul Crowley wrote:

Make life easy
Start the self employment on 6 April

They've already registered before they joined us and it isn't that extreme, it's a couple of months in fact. I was just being extreme for effect.

So they need to pay Class 3 until they become SE, thanks both!

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Replying to Constantly Confused:
RLI
By lionofludesch
28th Jan 2021 12:46

Constantly Confused wrote:

So they need to pay Class 3 until they become SE, thanks both!

I dunno.

There's not enough information.

What happened in the rest of the year ?

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Replying to lionofludesch:
Kitten
By Hazel Accounts
04th Feb 2021 09:44

Agree - they don't need to pay Class 3 - it's voluntary.

I assume they mean do they need to pay to get a full year's pension credit - in which case you do need to look at while year and how much Class 4 they will pay too......

Why not wait until year ends and then top up if needed?

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Replying to Hazel Accounts:
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By Constantly Confused
04th Feb 2021 09:54

Hazel Accounts wrote:

Agree - they don't need to pay Class 3 - it's voluntary.

I assume they mean do they need to pay to get a full year's pension credit - in which case you do need to look at while year and how much Class 4 they will pay too......

Why not wait until year ends and then top up if needed?

Why not wait till the 2019/20 tax year ends? Ok, done, now what? ;)

I admit I have alsways assumed that if they pay £1 of Class 4 then that year counts, but if they pay no Class 4 then they need to either be 'paying' Class 1 (either actually or via being between the LEL and PT) or paying Class 2 (voluntarily or otherwise).

The idea they might pay nothing for 11 months but then a load of Class 4 in month 12, making it a qualifying year, is beyond my ken.

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Replying to Constantly Confused:
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By lionofludesch
04th Feb 2021 10:13

Constantly Confused wrote:

I admit I have alsways assumed that if they pay £1 of Class 4 then that year counts.....

Class 4 has nothing to do with future entitlement.

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Replying to lionofludesch:
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By Constantly Confused
04th Feb 2021 09:49

lionofludesch wrote:

Constantly Confused wrote:

So they need to pay Class 3 until they become SE, thanks both!

I dunno.

There's not enough information.

What happened in the rest of the year ?

Nothing happened, they had no income.

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Replying to Constantly Confused:
RLI
By lionofludesch
04th Feb 2021 10:16

Constantly Confused wrote:

lionofludesch wrote:

Constantly Confused wrote:

So they need to pay Class 3 until they become SE, thanks both!

I dunno.

There's not enough information.

What happened in the rest of the year ?

Nothing happened, they had no income.

No income is only part of the answer. Was the client covered in some other way ? Sickness ? Home Responsibilities ? etc etc ?

If not, then the choice is indeed, pay up using Class 3 or write the year off in terms of pension qualifcation.

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RLI
By lionofludesch
28th Jan 2021 11:38

Depends.

What happened in the rest of the tax year ?

In the case you quote, I probably would suggest that the client pay a week's Class 3. But be careful, NI years don't always start on 6th April. They start on the first Monday (or is it Sunday? I can never remember) after 5th April.

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