NI status

[apusmelba]

i was self employed and chose to take a break so ran my business down and took the NI exemption certificate
after a couple of years i took a job as PAYE which i left after a couple of years to take another break
i subsequently received a letter asking for self employed class 2 NI contributions which i am paying
am i in the wrong here for being an economically inactive person
i am funding my break thro my own savings which i paid tax on and i chose not to apply for any benefit/assisstance from the state but i realise i need to maintain my NI payment record
i cant see how the system caters for people like me
but feel there may be some serious financial penalties from my actions if i am not careful
any advice as to options?

[wolf1]

I thought you were supposed to pay irrespective of your employment status. If you were say for example claiming dole or whatever they call it these days. The job centre would be paying your national insurance as they are technicaly your employer.

All the above could be total tosh though

[thepeoplespal]

If I am not mistaken it might be something to do with buying additional NI years to go towards your old age pension. It will probably say you have until 2009 to pay, well thats what I got anyway.

[Eric Mc]

Employee - Pays Class 1 NI on their earnings above the Upper Earning Limit. Employer pays an additional Class 1 contribution for each employee too.

Self Employed - pays monthly or quarterly Class 2 set at £2.05 per week. Also pays Class 4 as part of their annual Self Assessment tax bills. No need to pay if Self Employed earnings fall below the Self Employed Earnings Exception (SEE)limit.

No Income or below SEE limits - individual can pay voluntary Class 3 contributions.

The important aspect of NI contributions is making continuous payments with as few gaps as possible in your contributions over your working life.

>> Edited by Eric Mc on Thursday 4th November 18:24