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NI Contributions

NI Contributions

Old Jan 11th 2015, 8:30 am
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Default NI Contributions

Hi All,

Just after a little advice/opinions on the following, I recall reading somewhere it is beneficial to continue paying NI whilst living in the US, so both my wife and I are on the L1 visa, and will probably end up applying for a green card in due course.

The wife is currently in the US and has been for the past month, she is 28 years old and has been working in the UK paying all relevant taxes since leaving school, etc.

I'm currently still in the UK (sorting the last bits out, trying to rent out our house) I am 28 years old and have also been paying all relevant taxes since leaving school, I am currently self employed.

Should we continue to pay NI contributions and if so can we?

I also recall reading somewhere we should ideally sell our house in the UK prior to been granted US citizenship to avoid any tax implications?

Thanks in advance for any pointers in the right direction :-)
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Old Jan 11th 2015, 12:18 pm
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Default Re: NI Contributions

Originally Posted by jtj1 View Post
Hi All,

Just after a little advice/opinions on the following, I recall reading somewhere it is beneficial to continue paying NI whilst living in the US, so both my wife and I are on the L1 visa, and will probably end up applying for a green card in due course.

The wife is currently in the US and has been for the past month, she is 28 years old and has been working in the UK paying all relevant taxes since leaving school, etc.

I'm currently still in the UK (sorting the last bits out, trying to rent out our house) I am 28 years old and have also been paying all relevant taxes since leaving school, I am currently self employed.

Should we continue to pay NI contributions and if so can we?

I also recall reading somewhere we should ideally sell our house in the UK prior to been granted US citizenship to avoid any tax implications?

Thanks in advance for any pointers in the right direction :-)
Can you - yes.

Should you - probably not at your age. Minimum years needed to qualify for a *full* state pension is changing to 35 years (is currently 30 years), and you have plenty of time to build up 35 years.

Having said that, voluntary Class II NI are pretty inexpensive and who's to say that a future government doesn't change state pension qualifying years to a higher figure (it used to be 44 years until a few years ago, when it changed to 30 years, and now it is changing to 35 years). So if you want to play it safe you might want to make voluntary payments.

Another consideration is whether future governments will remove the opportunity to pay Class II NI contributions if you are working overseas. Currently they are so cheap it's ridiculous.
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Old Jan 11th 2015, 12:37 pm
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Default Re: NI Contributions

Also, this is a decision you can put on the back burner for a few years without losing anything, because if and when you apply to pay Class II NICs, and you qualify, you can pay up to six years arrears.

To qualify, you have to have been employed in the UK then employed in the foreign country. (It's more complex than that, but I believe that is the gist.)
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Old Jan 11th 2015, 2:37 pm
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Default Re: NI Contributions

Originally Posted by robin1234 View Post
....... To qualify, you have to have been employed in the UK then employed in the foreign country. (It's more complex than that, but I believe that is the gist.)
That is the gist of it, and it might be different if you were selfemployed (I wasn't, so didn't pay close attention to that bit of the web site. The alternative if you don't qualify (you have to apply/request) to pay Class 2 contributions, is to pay Class 3, which are quite a lot more.
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Old Jan 11th 2015, 4:08 pm
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Default Re: NI Contributions

How do they actually verify that you are/were employed in the US? Or do they
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Old Jan 11th 2015, 4:12 pm
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Default Re: NI Contributions

Originally Posted by Hotscot View Post
How do they actually verify that you are/were employed in the US? Or do they
I had to provide the name and address of my US employer. What the NI people did with it I do not know, but US employers will typically confirm that person X is an employee and has been since Y date. ...... Given that it took a good couple of months to approve me for Class 2 AVCs, they had plenty of time to run checks, possibly even by snail-mail.
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Old Jan 11th 2015, 4:18 pm
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Default Re: NI Contributions

I probably did the same years ago and just can't remember being an old fogie...
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Old Jan 11th 2015, 10:23 pm
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Default Re: NI Contributions

Originally Posted by Pulaski View Post
I had to provide the name and address of my US employer. What the NI people did with it I do not know, but US employers will typically confirm that person X is an employee and has been since Y date. ...... Given that it took a good couple of months to approve me for Class 2 AVCs, they had plenty of time to run checks, possibly even by snail-mail.
Pulaski,

how long was it since you last paid NI contributions? Is there a limit from when you last paid? Just had my forecast from the Gov and currently I get a full pension with 31 years contributions but I expect I'll need to pay AVCs for another 4 years to get the proposed 35 years for the full pension after 2016. It's been nearly 7 years since I paid any UK NI contributions.
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Old Jan 12th 2015, 12:44 am
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Default Re: NI Contributions

Originally Posted by Sheepdip View Post
Pulaski,

how long was it since you last paid NI contributions? Is there a limit from when you last paid? Just had my forecast from the Gov and currently I get a full pension with 31 years contributions but I expect I'll need to pay AVCs for another 4 years to get the proposed 35 years for the full pension after 2016. It's been nearly 7 years since I paid any UK NI contributions.
I haven't paid anything in 13 years, since October 2001. The time since I last "paid in" does not appear to be an issue or consideration. I am over half way to a "full pension", and have easily enough working years left to get to 35 years. I am going to assume that the requirement might reach "40 years of contributions" before I retire, so after "catching up" in the next few weeks, I intend to keep on paying until I reach at least 35 years of contributions, and be ready to make another catch-up payment in the event the goal posts are moved again the years between me reaching 35 years of contributions and my retirement.

Last edited by Pulaski; Jan 12th 2015 at 1:40 am.
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Old Jan 12th 2015, 1:11 am
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Default Re: NI Contributions

Retire at 40?

Spend all your time here?
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Old Jan 12th 2015, 1:41 am
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Default Re: NI Contributions

Originally Posted by Hotscot View Post
Retire at 40?

Spend all your time here?
40 years of contributions!
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Old Jan 12th 2015, 1:52 am
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Default Re: NI Contributions

Doh!
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Old Jan 12th 2015, 2:12 am
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Default Re: NI Contributions

Originally Posted by Pulaski View Post
I haven't paid anything in 13 years, since October 2001. The time since I last "paid in" does not appear to be an issue or consideration. I am over half way to a "full pension", and have easily enough working years left to get to 35 years. I am going to assume that the requirement might reach "40 years of contributions" before I retire, so after "catching up" in the next few weeks, I intend to keep on paying until I reach at least 35 years of contributions, and be ready to make another catch-up payment in the event the goal posts are moved again the years between me reaching 35 years of contributions and my retirement.
Thanks for the info!
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Old Jan 12th 2015, 2:31 am
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Default Re: NI Contributions

There was a thread on this recently, and I'm sure someone said that the "proposed" increase to 35 was now an "actual". Can't find the thread now....

As far as following up, I don't think they do, or at least not 100%. We have an S corp here which pays my salary. Every 7ish years the nice folks at NI send me a letter asking to confirm if my employment status is the same, but they have never sent a letter to the S corp to confirm what I tell them.
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Old Jan 12th 2015, 2:44 am
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Default Re: NI Contributions

Originally Posted by Yorkieabroad View Post
As far as following up, I don't think they do, or at least not 100%. We have an S corp here which pays my salary. Every 7ish years the nice folks at NI send me a letter asking to confirm if my employment status is the same, but they have never sent a letter to the S corp to confirm what I tell them.
Good to know. I was wondering if, since I have an LLC, am I self employed or employed by my LLC.
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