Confusion springs from NIC threshold amends
The Spring Statement has left some self-employed traders with a bewildering class 2 NIC credits situation that varies according to their total trading profits for the year.
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In the tax talk Rebecca Benneyworth advised to not claim mileage etc to increase profits to enable an NI credit.
Do you agree with this?
As I've thought with the endless mortgage application requests, not claiming expenses (whilst better for the taxman) is not an accurate reflection of the profitability of the business
Not sure how much of a mortgage you're going to get on £6k of profit, but if you can find a lender let me know.
I think anyone making £6,600 might decide some expenses are personal, or someone making £12k might find £100 expenses.
Someone with more time will work out the actual tipping points.
Off topic, sorry, but it's bugging me:
"Confusion springs from NIC threshold *amendments* "
My reading of the National Insurance Contributions (Increase of Thresholds) Act 2022, is that anyone with profits of below the NIC threshold gets credit.
"Regulations under this section may—
(a)also make provision having the effect that, in such circumstances as may be provided for, a person whose profits for a tax year are less than that threshold is treated as making Class 2 contributions"
If that was the case voluntary class 2 NIC would then become redundant?!
I think HM Government forgot voluntary Class 2 existed when the Spring Statement was announced. Firstly, there was no mention of it in the speech. Secondly, there was no mention of it in the documents published afterwards. Thirdly, I raised it on HMRC's Agent Forum to which HMRC responded "At present we are unable to answer your queries as the finer details of the Spring Budget announcement which are still being discussed by the project team. Guidance will be issued a soon as possible via the usual channels." I don't regard voluntary class 2 as "finer details". If HMG forgot about the existence of voluntary class 2, what else have they forgotten about?