NI contributions

Salary for some years below the LEL

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I have just been reviewing a new clients payroll and note that the two Directors have been paying themselves below the LEL for several years now, my understanding is that these years will not count as a NIC contribution for state pension purposes. Unfortunately the salary has been about £200 too low per annum. Is there any way around this other than them making voluntary Class 3 NIC's? Just seems a shame that they set their salary levels slightly too low. 

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RLI
By lionofludesch
03rd Mar 2022 07:35

What did their previous accountant advise?

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By Wanderer
03rd Mar 2022 09:04

For as long as I can remember years I've subscribed to the view pay at least just above the Primary Threshold. Never relied on the above LEL below PT 'trick'.
Particularly true in the pre online filing days when you couldn't rely on the Contributions Agency to properly process their (was it green?) copy of the P14.
Has been reported on here a couple of times when people didn't get credited when using the 'trick'. Of course shouldn't now happen with RTI but there's no relying on HMRC systems, particularly in 20-30 years time when trying to claim SRP & getting told ' You have missing years'.

Anyway back to the question. Any chance these two had other employments / self employments which would make them count?

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Replying to Wanderer:
RLI
By lionofludesch
03rd Mar 2022 09:37

Wanderer wrote:

Particularly true in the pre online filing days when you couldn't rely on the Contributions Agency to properly process their (was it green?) copy of the P14

Orange.

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Replying to lionofludesch:
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By Wanderer
03rd Mar 2022 10:40

Yep, you are right! It was
P14 part 1 (orange)
P14 Part 2 (green)
P60 blue

https://webarchive.nationalarchives.gov.uk/ukgwa/20140109143644/http://w...(cont-land)(06-07).pdf

I never liked the idea of the central part not containing any contribution amounts. Too easy for a lazy processor to ignore.

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Replying to Wanderer:
paddle steamer
By DJKL
03rd Mar 2022 11:06

Sounds like an Old Firm game.

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Replying to DJKL:
RLI
By lionofludesch
03rd Mar 2022 11:56

Well, PAYE was based in Cumbernauld at the time.

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By Paul Crowley
03rd Mar 2022 09:27

Did they have a PAYE scheme?
Sounds to me as if DIY, or choose not to pay fees for a wages scheme.
Ask client but my guess is that it was a deliberate (but bad) decision.

I personally prefer not to rewrite history

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Replying to Paul Crowley:
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By Leywood
03rd Mar 2022 11:17

DIY - My thoughts too.

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By Yossarian
03rd Mar 2022 09:47

It would be worth them obtaining state pension forecasts. It may be that they will ultimately have enough NI contributions to qualify for a full pension without the years in question anyway.

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Morph
By kevinringer
04th Mar 2022 14:13

Do they need those years to count towards state pension? You only need 39 years which gives most of us quite a few spare years. Your clients can check their contributory record on the PTA (I know, how much better it would be if we could access the PTA). If your clients do need the years then I think Class 3 is their only option. If your clients don't want to pay then it's up to them to take action against their former advisors. That will depend upon the terms of the previous engagement. Either way, you need to make sure your clients realise that you've spotted something that might have gone unnoticed for many years with the previous advisor and what else have they missed?

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