I have recently taken on a client who has a small limited company which only employs himself. For years, his previous accountant has made sure that when he was paid as an employee of the company, he was paid below the NI threshold to avoid paying NI. I queried this and he was under the assumption that each year that he didn't pay national insurance was still a year counting towards his pension. However, my understanding is that you actually have to pay national insurance in a year for that year to count towards your pension. Can anyone please confirm which is right?
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His previous accountant is right, presuming by "NI threshold" you mean the PT and that the payments were above the LEL.
What you are missing is that the threshold for the year to qualify for pension purposes is not the same as the threshold above which NI is payable the earnings.
If his salary was above the LEL and below the PT, he would still have been technically paying NI, it's just that the rate at which he was 'paying' it was 0%, so it still counts.
Additionally if you are relying on 'Above lower earnings limit but below primary threshold' rule then you need to make sure PAYE / RTI submissions were made.
Why have you taken on a client when you don't know the basics? Do you not go on courses? Do you not have any textbooks? I hope that your clients do not see your post and come to the conclusion that you do not know what you are doing and hence leave you!