Class 2 or Class 3 national insurance contributions?
#46
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Joined: Aug 2013
Location: Eee Bah Gum
Posts: 4,128
Re: Class 2 or Class 3 national insurance contributions?
Thanks again, I have just finished talking to a IRS person in Philadelphia about the completing the 8802 form which accompanies the individual 2002 form along with the $85 fee. He informed me that I have to file this every year (along with the fee) can you confirm that HMRC only requires the US-Individual to be filled once to become and remain UK Tax Exempt unless one's circumstances change?
When I started receiving my small private UK pension 6 years ago I had to complete the 8802 form plus a $35 fee and then filed with HMRC and they stopped taking tax from my UK pension (and refunded the the month they took while I got the forms filed).
I haven't filed it since and they continue to pay my UK pension free of taxes, and I then declare it on my US return and pay US taxes each year.
#47
Re: Class 2 or Class 3 national insurance contributions?
I have to say I always find this topic somewhat bemusing, I spoke to DWP only the other day.
So theoretically my voluntary Class 2 NICs will be collected now for 35 years instead of just 30 but I'll get a higher basic state pension when I hit the retirement age. But in fact I don't think I will because the second state pension is being abolished so any contributions I made to that years ago won't count. The lady I was talking to was completely confused trying to explain it to me because I live in Canada and there is no cost of living adjustment. "But you'll be better off, oh well, maybe you won't be ah... I tell you what I'll send you a statement and you can see for yourself."
And at the end of the day, if you think this is set in stone and won't change again, I've got a bridge in Brooklyn to sell you...
So theoretically my voluntary Class 2 NICs will be collected now for 35 years instead of just 30 but I'll get a higher basic state pension when I hit the retirement age. But in fact I don't think I will because the second state pension is being abolished so any contributions I made to that years ago won't count. The lady I was talking to was completely confused trying to explain it to me because I live in Canada and there is no cost of living adjustment. "But you'll be better off, oh well, maybe you won't be ah... I tell you what I'll send you a statement and you can see for yourself."
And at the end of the day, if you think this is set in stone and won't change again, I've got a bridge in Brooklyn to sell you...
#48
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Joined: Apr 2011
Location: Ohio
Posts: 1,834
Re: Class 2 or Class 3 national insurance contributions?
Of course, it's been a tiresome headache of 'what do I need to report' since moving here, and it'll continue to be tax annoying in the future, but at least I get to keep the cash!
#49
Forum Regular
Joined: Aug 2013
Location: Los Angeles
Posts: 92
Re: Class 2 or Class 3 national insurance contributions?
When I started receiving my small private UK pension 6 years ago I had to complete the 8802 form plus a $35 fee and then filed with HMRC and they stopped taking tax from my UK pension (and refunded the the month they took while I got the forms filed).
I haven't filed it since and they continue to pay my UK pension free of taxes, and I then declare it on my US return and pay US taxes each year.
I haven't filed it since and they continue to pay my UK pension free of taxes, and I then declare it on my US return and pay US taxes each year.
This is the way I figured it, just a one time file as far as the UK tax free goes, many thanks for the confirmation.
#50
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Joined: Aug 2013
Location: Los Angeles
Posts: 92
Re: Class 2 or Class 3 national insurance contributions?
Oh well, here we go again, I have been receiving my reduced state pension since I hit 65 years of age in April, my wife receives 60% of what I get, all good up to now. I received a letter from DWP on April 1 2014 saying I was entitled by law to pay up a further seven years to make up my weekly pension amount (I currently get 20 years all at class 2, 14 years working in the UK and 6 years employed in the USA make up at class 2 rate) The letter showed the missing years and amounts to be paid all at Class 3 rate which is how the rule is written, the year 2013 to 2014 was blank and I telephoned to see if I could pay the current year at class 2 the DWP employee said she could not see why not as it was a considerable amount less than class 3. To cut to the chase I applied for the last year and heard nothing, contacting them again in July I was told to re apply, I have just had a response and they want 13.75 GBP per week quoting that as class 2. Surely this is an error as I am still employed in the USA and I did not reach State pension age until after April 5th 2014. In my opinion I need only need to pay up 140.40 GBP class 2 rate to pay my final year? Comments/Advice anyone?
#51
Re: Class 2 or Class 3 national insurance contributions?
I have just had a response and they want 13.75 GBP per week quoting that as class 2. Surely this is an error as I am still employed in the USA and I did not reach State pension age until after April 5th 2014. In my opinion I need only need to pay up 140.40 GBP class 2 rate to pay my final year? Comments/Advice anyone?
#52
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Joined: Aug 2013
Location: Los Angeles
Posts: 92
Re: Class 2 or Class 3 national insurance contributions?
#53
Re: Class 2 or Class 3 national insurance contributions?
I think there is some ambiguity even among people at HMRC on what rate you pay if you are paying in arrears (making up missed years).
Generally, the advice they seem to give is that if it is make-up years, you pay Class III. This is the case even if, during the years you missed, you were eligible for paying Class II.
However, there are one or two people on here who have managed somehow to pay for missed years via Class II.
Generally, the advice they seem to give is that if it is make-up years, you pay Class III. This is the case even if, during the years you missed, you were eligible for paying Class II.
However, there are one or two people on here who have managed somehow to pay for missed years via Class II.
#54
Re: Class 2 or Class 3 national insurance contributions?
You are paying NICs at the Class 3 rate.
#55
Re: Class 2 or Class 3 national insurance contributions?
I think there is some ambiguity even among people at HMRC on what rate you pay if you are paying in arrears (making up missed years).
Generally, the advice they seem to give is that if it is make-up years, you pay Class III. This is the case even if, during the years you missed, you were eligible for paying Class II.
However, there are one or two people on here who have managed somehow to pay for missed years via Class II.
Generally, the advice they seem to give is that if it is make-up years, you pay Class III. This is the case even if, during the years you missed, you were eligible for paying Class II.
However, there are one or two people on here who have managed somehow to pay for missed years via Class II.
#56
Forum Regular
Joined: Aug 2013
Location: Los Angeles
Posts: 92
Re: Class 2 or Class 3 national insurance contributions?
Yes, there seems to be some confusion amongst those at HMRC, last year I paid up the 6 allowable years at class two which came out at 980.00 GBP. Then I received the letter advising me I could pay up to a further seven years but all were at class three (far to expensive) but 2013-2014 was left blank, after this I phoned DWP and was told I could pay for 2013 2014 at class two I just needed to apply and send it to HMRC for approval. My argument is that as my employment circumstances have not changed why are they saying my class two rate is 13.75 pw when everyone else pays 2.70 GBP pw?
I telephoned the DWP this morning and they took note of the details and asked who had signed the letter and said I would receive at call from that department. Fingers crossed it will be resolved in my favor.
I telephoned the DWP this morning and they took note of the details and asked who had signed the letter and said I would receive at call from that department. Fingers crossed it will be resolved in my favor.
Last edited by Westham; Aug 29th 2014 at 1:40 pm.
#57
Re: Class 2 or Class 3 national insurance contributions?
Yes, there seems to be some confusion amongst those at HMRC, last year I paid up the 6 allowable years at class two which came out at 980.00 GBP. Then I received the letter advising me I could pay up to a further seven years but all were at class three (far to expensive) but 2013-2014 was left blank, after this I phoned DWP and was told I could pay for 2013 2014 at class two I just needed to apply and send it to HMRC for approval. My argument is that as my employment circumstances have not changed why are they saying my class two rate is 13.75 pw when everyone else pays 2.70 GBP pw?
I telephoned the DWP this morning and they took note of the details and asked who had signed the letter and said I would receive at call from that department. Fingers crossed it will be resolved in my favor.
I telephoned the DWP this morning and they took note of the details and asked who had signed the letter and said I would receive at call from that department. Fingers crossed it will be resolved in my favor.
In 2006 I returned to the UK after being away since 1983, during which I paid no NI (don't get me started on why ...).
I requested a pension forecast and as part of this, it noted that I was working overseas for 23 years. It also noted that I could make up 6 missing years, via Class III. At the time I simply could not afford this (I could maybe have paid 2 years, but was put off by the cost).
I am sure this was a mistake and of course now I am past the 6-year window. I had thought of appealing, to be able to make up 2000-2006 via Class II's, on the basis that I was given wrong information at the time. I'd be interested what people's opinions are on this. I probably just need to get my arse in gear and write up a case.
#58
Forum Regular
Joined: Aug 2013
Location: Los Angeles
Posts: 92
Re: Class 2 or Class 3 national insurance contributions?
Yes I would appeal, what harm could it do?
For what it's worth here is my story sorting out my NIC's. I also let my NIC's lapse and was only allowed to pay up six years, they gave me class 3 rates but told me if I could prove I was working and gave my details I would be considered by HRMC to be able to pay at class 2 rate. I gave the details (nobody from HRMC ever contacted my employer) and within a couple of months I received a letter telling me class 2 was accepted and how much I should pay up and where to send it.
I started receiving my reduced pension (20 years) when I reached 65 last April.
Shortly after this I received a letter explaining that the Law allowed me to pay up a further 7 years but it could be only paid at class 3 rates, the rates were shown for my missing years and they ranged from 1 year at 390 GBP 1 year 440 GBP's and the remaining 5 years at 715.00 GBP's this left 2013 2014 without an amount. I requested to pay 2013 2014 at class 2 rate of 140.40 GBP's to which they wrote back and said I could pay up for this year and my class 2 rate was $13.75 per week making as total of 715 GBP
This is what I questioned and I have just received a telephone call back saying that there was a mistake in the calculations on my class 2 rate and all I needed paying up was the 140.40 which I intend to put in the mail today.
For what it's worth here is my story sorting out my NIC's. I also let my NIC's lapse and was only allowed to pay up six years, they gave me class 3 rates but told me if I could prove I was working and gave my details I would be considered by HRMC to be able to pay at class 2 rate. I gave the details (nobody from HRMC ever contacted my employer) and within a couple of months I received a letter telling me class 2 was accepted and how much I should pay up and where to send it.
I started receiving my reduced pension (20 years) when I reached 65 last April.
Shortly after this I received a letter explaining that the Law allowed me to pay up a further 7 years but it could be only paid at class 3 rates, the rates were shown for my missing years and they ranged from 1 year at 390 GBP 1 year 440 GBP's and the remaining 5 years at 715.00 GBP's this left 2013 2014 without an amount. I requested to pay 2013 2014 at class 2 rate of 140.40 GBP's to which they wrote back and said I could pay up for this year and my class 2 rate was $13.75 per week making as total of 715 GBP
This is what I questioned and I have just received a telephone call back saying that there was a mistake in the calculations on my class 2 rate and all I needed paying up was the 140.40 which I intend to put in the mail today.
#59
Re: Class 2 or Class 3 national insurance contributions?
Class 2 for me. 2.65 a week for the past 6 years.
#60
Re: Class 2 or Class 3 national insurance contributions?
A few words of warning. If you reach pension age after April 2016, your US born spouses will no longer be entitled to a UK pension; you will now need 35 years of contributions for a full pension.
When I took the decision to make voluntary payments I needed 30 years of contributions and my US wife would also get a UK pension, it was a no brainer. I haven't done the math since, but I've already paid 7 years (6 years catchup and this past year). I'm too far in to it for it not to make financial sense - unless they change the rules again before I retire...
When I took the decision to make voluntary payments I needed 30 years of contributions and my US wife would also get a UK pension, it was a no brainer. I haven't done the math since, but I've already paid 7 years (6 years catchup and this past year). I'm too far in to it for it not to make financial sense - unless they change the rules again before I retire...
Says the 35-year contribution requirement only applies to people who start contributing after April 2016, so we still only need 30 years of contributions. Phew, I was wondering how I was going to afford paying £145 annually for five more years.
Also says they don't count years before you were 19 which seems a bit unfair, I was contributing before that. This is apparently a new thing. So this is a way of fiddling it to be 33 years of contributions because you start paying when you're 16 and working.