NI Contributions – the Change is Imminent!

We always like to keep clients and the general populace abreast of the latest information. So, we have another head’s up for you today and this time it’s around National Insurance (NI). In particular, it’s about restrictions to your NI contributions top-ups!

At present, people can make voluntary National Insurance payments to fill gaps in their contribution records dating back to April 2006. However, come the 6th April 2023, this will only be possible for the previous six tax years.

The extended timeframe to make voluntary NI Contributions is nearly up!

The ICAEW has emphasised the significance of the extended timeframe for voluntary NI contributions. So, anyone wanting to take advantage of the old regulation will need to do so by 5th April 2023. Thereafter, the more limited system will be in place, only allowing you to go back as far as the previous six years at any given time.

How might the change impact me?

The NIC record plays a critical role in determining many benefits, and entitlements to state pension can vary significantly based on the number of contribution years. It is therefore important for everyone to check their national insurance records as soon as possible, which can be completed online, and carefully consider whether additional contributions, either Class 2 NI or Class 3 NI, would be worthwhile. It is also important to investigate discrepancies if HMRC’s records do not accurately reflect your full contribution history.

What about ‘rest of the world’ implications?

Individuals who have worked in “rest of the world” countries, such as India, Australia, or Singapore, may be more likely to have incomplete NI records. These individuals should consider requesting a state pension forecast from HMRC. This will help to determine any gaps in their historical coverage and evaluate the possibility of making top-up contributions to protect their state pension entitlements.

Remember, we’re here to help!

As accountants, we know the constant shift in rules and regulations around your finances can be challenging to keep on top of. We also know the terminology can make it hard to decipher and understand. But, rest assured, we are experts in the field, so if you would like to see how we can help, please do give us a call!

 

Please do get in touch to see how we can help on 01243 782 423, or email us from our contact page and someone will be in touch!

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