Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Class 2 NI. What about us poor expats paying voluntary contributions?

Class 2 NI. What about us poor expats paying voluntary contributions?

Old Jan 24th 2019, 9:56 am
  #271  
tbm
Forum Regular
 
Joined: May 2011
Location: Planet Earth
Posts: 80
tbm is an unknown quantity at this point
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by Aquapanther
Guys, I left the UK on an L1 visa in September 2017.
[..]
2) How do I go about claiming UK tax refunds against the 2016 and 2017 US tax I paid to the IRS?
Can you please post your whole question as a new thread. Most of it isn't related to voluntary NI.

Also, did you leave in September 2017 or 2016? (You can answer this when you post the new thread.)
tbm is offline  
Old Jan 24th 2019, 1:04 pm
  #272  
Forum Regular
 
Joined: Mar 2016
Posts: 119
Aquapanther is an unknown quantity at this point
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by tbm
Can you please post your whole question as a new thread. Most of it isn't related to voluntary NI.

Also, did you leave in September 2017 or 2016? (You can answer this when you post the new thread.)
Sorry...thread started!
Aquapanther is offline  
Old Apr 25th 2019, 2:50 am
  #273  
Forum Regular
 
Joined: Jun 2008
Location: Virginia
Posts: 134
hutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond reputehutchison has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by Aquapanther
Guys, I left the UK on an L1 visa in September 2017.
The intention was that I would spend an undetermined period of time in the US (working for the US sister company of my employer), and return later.
I was still being paid through the UK up until end March 2018, so was paying income tax and NIC's in the UK.
In April 2018 I moved to the US payroll and started paying federal income tax, but was still paying NIC.

In August 2018 I got married to a USC, quit my job, and adjusted status to a US permanent resident.

My US tax position is up to date now (paid 2016 and 2017 US taxes) so I have a couple of questions.

1) How do I go about paying voluntary NIC to protect my UK pension (I currently have 22 years paid)?
I have looked at the N138 document but it is not clear to me as it states that I will have to have paid 52 weeks class 1, before I can pay class 2's or 3's...however as I have not been employed since August I dso not have 52 weeks paid up?


2) How do I go about claiming UK tax refunds against the 2016 and 2017 US tax I paid to the IRS?


Cheers.
you can apply to pay class voluntary 2 them through the HMRC website (i think I did it that way) and a letter came through my uk post address door just now. the post receiver gave me images of the post and i paid from over here via my remaining uk bank account (just switched it online). I have been here 2 years working U.S, no other contributions were made. I had 27 years prior to this.

just did this APR 2019 , so class 2 NI is still available to pay as a voluntary contribution.

Last edited by hutchison; Apr 25th 2019 at 2:53 am.
hutchison is offline  
Old Apr 25th 2019, 3:20 am
  #274  
Lost in BE Cyberspace
 
mrken30's Avatar
 
Joined: Jul 2008
Location: Portlandia Metro
Posts: 7,427
mrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

I just called them and they sent me the relevant forms to my US address. 0300 200 3500 or you can just fill out the form on this site and return it https://www.gov.uk/government/public...ty-abroad-ni38 The same site also tell you what you need to do to get tax refunds and to finalize leaving the UK https://www.gov.uk/tax-right-retire-abroad-return-to-uk

Last edited by mrken30; Apr 25th 2019 at 3:23 am.
mrken30 is offline  
Old Apr 25th 2019, 1:42 pm
  #275  
Forum Regular
 
OldJuddian's Avatar
 
Joined: Jun 2011
Location: PNW
Posts: 215
OldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond reputeOldJuddian has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Due to "You'll need 35 qualifying years to get the full new State Pension." Is there any reason for an expat to pay class 2 NI once 35yrs has been reached?
OldJuddian is offline  
Old Apr 25th 2019, 2:14 pm
  #276  
Lost in BE Cyberspace
 
mrken30's Avatar
 
Joined: Jul 2008
Location: Portlandia Metro
Posts: 7,427
mrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Not really, except they keep moving the goal posts every few years.
mrken30 is offline  
Old Apr 25th 2019, 8:15 pm
  #277  
BE Forum Addict
 
Joined: Aug 2013
Location: Eee Bah Gum
Posts: 4,183
durham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by OldJuddian
Due to "You'll need 35 qualifying years to get the full new State Pension." Is there any reason for an expat to pay class 2 NI once 35yrs has been reached?
No need to get more than 35. It was only recently that it was increased from 30 to 35 so is unlikely to increase again anytime soon. Even when they did announce the increase in years needed, people already receiving the pension were not penalized and people close to retirement age were allowed to buy extra years to get up to 35. Unfortunately we were not close enough when they increased it to 35 so I will have 30 years and my wife 31 years when we receive the State pension in a couple of years time.
durham_lad is offline  
Old Apr 26th 2019, 12:21 am
  #278  
Wondering if...
 
celticgrid's Avatar
 
Joined: Apr 2009
Location: Clarence, NY
Posts: 1,214
celticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond reputecelticgrid has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by OldJuddian
Due to "You'll need 35 qualifying years to get the full new State Pension." Is there any reason for an expat to pay class 2 NI once 35yrs has been reached?
Altruism?

No reason, but do keep up to date with rule changes. As already noted, it is unlikely there will be significant change so soon after a rather large overhaul, but even if there was you could expect to have the chance to pay in arrears to catch up again.
celticgrid is offline  
Old Apr 26th 2019, 3:52 am
  #279  
Furby
 
Glasgow Girl's Avatar
 
Joined: Apr 2016
Location: St. Louis, MO.
Posts: 889
Glasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond reputeGlasgow Girl has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

There is a reason to continue to contribute Class 2 NICS if you ever contracted out of the state pension. The reason is that even if you paid 35 full years, your pension will be reduced by an amount calculated in line with the number of years that you contracted out. However, since April 2016 every full year of contributions will increase your state pension by about 4.81 GBP until you reach the maximum of 168.60 GBP. When you reach that amount you should cease contributions.

As an example, in my case I contracted out in the late 80s and 90s. Even though I contributed 35 full years, my state pension was only forecast as about 129 GBP instead of the full 155 GBP (as it was a few years ago when it was first introduced). So my pension was reduced by 26 GBP. In my case, if I contribute a further 6 years NICS then I will restore my pension to the full amount. I have done so, and since 2016, each year when I get a forecast I can see the forecast amount increasing getting me up towards the full pension.

Some say, this reduction is unfair, but in reality you paid less NICS back in the day and so you saved back then, plus by contracting out you were able to invest elsewhere. In any case, those who contracted out made that choice and we now have to live with the consequences, fair or not.

So, in short, if you contracted out and are eligible for Class 2 NICS then the ROI is most definitely in your favor. Right now It costs you 3 GBP a week to increase your state pension by 4.81 GBP for every year that you collect it. Even if you only collect for 5 years you are looking at a return of 24.05 GBP on that 3 GBP investment. If you live a long time the return is as good an investment as you will ever get.

Once you get a forecast that is the full pension you should stop contributing as you cannot increase it above that amount. Plus, only the years starting on of after April 2016 count towards increasing you pension. So, if you had 37 years before April 2016, the extra 2 years will not do anything, but all years after that will.

Last edited by Glasgow Girl; Apr 26th 2019 at 3:59 am. Reason: Typos
Glasgow Girl is offline  
Old Apr 26th 2019, 4:08 am
  #280  
BE Enthusiast
 
newadventure's Avatar
 
Joined: Jun 2011
Posts: 388
newadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond reputenewadventure has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio


Wot Glasgow girl said. I am in a similar position having contracted out during the 90s. I can't see the argument for the reduction being unfair - as Glasgow Girl said, we paid less NICs when contracted out and as long as this was properly explained, you (don't) pays your money and takes your choice
newadventure is offline  
Old Apr 26th 2019, 8:38 am
  #281  
BE Forum Addict
 
Joined: Aug 2013
Location: Eee Bah Gum
Posts: 4,183
durham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by newadventure

Wot Glasgow girl said. I am in a similar position having contracted out during the 90s. I can't see the argument for the reduction being unfair - as Glasgow Girl said, we paid less NICs when contracted out and as long as this was properly explained, you (don't) pays your money and takes your choice
I agree, excellent post!!
durham_lad is offline  
Old Apr 28th 2019, 1:49 am
  #282  
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,564
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by Glasgow Girl
There is a reason to continue to contribute Class 2 NICS if you ever contracted out of the state pension. The reason is that even if you paid 35 full years, your pension will be reduced by an amount calculated in line with the number of years that you contracted out. However, since April 2016 every full year of contributions will increase your state pension by about 4.81 GBP until you reach the maximum of 168.60 GBP. When you reach that amount you should cease contributions.

As an example, in my case I contracted out in the late 80s and 90s. Even though I contributed 35 full years, my state pension was only forecast as about 129 GBP instead of the full 155 GBP (as it was a few years ago when it was first introduced). So my pension was reduced by 26 GBP. In my case, if I contribute a further 6 years NICS then I will restore my pension to the full amount. I have done so, and since 2016, each year when I get a forecast I can see the forecast amount increasing getting me up towards the full pension.

Some say, this reduction is unfair, but in reality you paid less NICS back in the day and so you saved back then, plus by contracting out you were able to invest elsewhere. In any case, those who contracted out made that choice and we now have to live with the consequences, fair or not.

So, in short, if you contracted out and are eligible for Class 2 NICS then the ROI is most definitely in your favor. Right now It costs you 3 GBP a week to increase your state pension by 4.81 GBP for every year that you collect it. Even if you only collect for 5 years you are looking at a return of 24.05 GBP on that 3 GBP investment. If you live a long time the return is as good an investment as you will ever get.

Once you get a forecast that is the full pension you should stop contributing as you cannot increase it above that amount. Plus, only the years starting on of after April 2016 count towards increasing you pension. So, if you had 37 years before April 2016, the extra 2 years will not do anything, but all years after that will.
Thanks GG, that's good advice, and confirms what I thought to be the case. Your situation sounds very similar to mine, and I will probably continue contributing after I reach 35 years for the reason you explained.
Pulaski is offline  
Old Aug 29th 2019, 6:37 am
  #283  
Just Joined
 
Joined: Aug 2019
Posts: 2
Oregon99 is an unknown quantity at this point
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Folks - i have received my quote for the past 8 years ay approx 8 x 145 quid . year.
The Ref code they gave me over the phone was my NI Number two random letters and my Name - and to use this when sending my money from my UK bank
So question - do i add all 8 years and send one lump sum? Or divide it into 8 payments (that all differ slightly) so that they "know" which year is for what ?
thanks !
Oregon99 is offline  
Old Aug 29th 2019, 6:59 am
  #284  
BE Forum Addict
 
Joined: Jul 2015
Location: Panama City, FL
Posts: 2,116
chawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond reputechawkins99 has a reputation beyond repute
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

Originally Posted by Oregon99
Folks - i have received my quote for the past 8 years ay approx 8 x 145 quid . year.
The Ref code they gave me over the phone was my NI Number two random letters and my Name - and to use this when sending my money from my UK bank
So question - do i add all 8 years and send one lump sum? Or divide it into 8 payments (that all differ slightly) so that they "know" which year is for what ?
thanks !
I called their hotline and told them what I was sending and for which years then sent a lump sum. They made a note on my account to that effect. All applied correctly except for one which was short as I didn't allow enough to cover wire fees from the US. Shouldn't be a problem from your UK bank.

For the number, see post #53 above.
chawkins99 is offline  
Old Aug 29th 2019, 7:10 am
  #285  
Just Joined
 
Joined: Aug 2019
Posts: 2
Oregon99 is an unknown quantity at this point
Default Re: Class 2 NI abolished. What about us poor expats paying voluntary contributio

thanks!
Oregon99 is offline  

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Your Privacy Choices -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.