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  • RE: Catching up on previous year's Class 2 contributions - NOT through PAYE?

    Hi there, Thank you for your reply, I will contact the Income Tax team regarding my past years' Class 2 payments. With regard to registering for self assessment not being the same as registering as self employed - yes, thankfully I know this *now*, but I was not aware of this at all when I first set up as self-employed as the information provided by gov.uk on this is extremely unclear. On this page (https://www.gov.uk/set-up-self-employed), titled "Set up as self-employed (a 'sole trader'): step by step", no mention is made of specifically filling out a different form to tell HMRC that you are self-employed; the final step is simply "Register for Tax": On this page (https://www.gov.uk/set-up-sole-trader) on how to set up as a sole trader, it says: "To set up as a sole trader, you need to tell HMRC that you pay tax through Self Assessment. You’ll need to file a tax return every year." Followed by a link to Self Assessment. "Your Responsibilities" on this page are listed solely as: - keep business records and records of expenses - send a Self Assessment tax return every year - pay Income Tax on your profits and Class 2 and Class 4 National Insurance [what I thought I was doing through Self Assessment] - and registering for VAT if your turnover is over £85,000. None of these information pages mention that there are any other steps involved in officially registering as self-employed besides registering for Self Assessment. Moreover, when one does register for Self Assessment (https://www.gov.uk/register-for-self-assessment/y), the very first question that it asks is "Why are you registering for Self-Assessment?", with the first option being **You're self-employed (for example, a sole trader)**. This is the option that I picked when registering for Self Assessment; foolishly, I thought that actively selecting a box titled "I am self-employed" in addition to filling in "Self-employment income and expenses" each year on my government-issued tax return meant that I had sufficiently informed the government that I was self employed... I am by no means the only person whom this has affected/who found this needlessly confusing; this news report from over *3 years ago* says that this "glitch" has potentially affected hundreds of thousands of self-employed people. (link removed by admin ) I would strongly urge gov.uk to revise their articles to stress that the extra step of filling out an extra form to inform HMRC of one's employment change is *required* in addition to registering for Self Assessment in order to be able to correctly pay one's required Class 2 NIC.
  • Catching up on previous year's Class 2 contributions - NOT through PAYE?

    Hi there, I have been registered as self employed and completing Self Assessment since 2020/2021, although I have only been making enough profit to pay any taxes since 2021/2022. While filling out my taxes for this past year of 2022/2023, I noticed that SA was saying I owed £0 Class 2 National insurance contributions, which didn't sound right at all. Looking back, I suddenly realized that my Class 2 contributions for the previous year were £0 as well, when I definitely should have been paying some. I looked into it and learned that this was apparently because I needed to "update my self-employment status with HMRC" and *tell* them I was self-employed (despite the fact that I set up as self-employed in 2020 and this is my third year completing Self Assessment... why??) Anyway, I updated my status and Self Assessment now correctly says that I owe ~£160 of Class 2 contributions for 2022-2023. But I am still in arrears for my Class 2 contributions for 2021-2022, and don't see any way to pay them. My tailored return added a bunch of questions about correcting underpaid tax (copied below), but *only* through PAYE; as far as I know, I don't have a PAYE code as I am solely self employed - I do not receive a regular paycheck from an employer from which PAYE tax could be deducted. Do I simply answer No to all these questions? How do I correct my underpaid Class 2 contributions from last year but NOT through PAYE? _________________________ **Underpaid tax included in PAYE coding (Page 1 of 2) ** Amount of underpaid tax for earlier years included in your tax code for 6 April 2022 to 5 April 2023 (from your PAYE Notice of Coding): £ 0.00 - Is this figure correct? **Underpaid tax included in PAYE coding (Page 2 of 2)** Our records show that your 2022 to 2023 PAYE Notice of Coding includes an adjustment for tax underpaid. Amount of estimated underpaid tax for 6 April 2022 to 5 April 2023 to be included in your PAYE tax code for 6 April 2023 to 5 April 2024 (from your PAYE Notice of Coding): £ 0.00 - Is this figure correct? **Correct Other Debts** Amount of outstanding debt included in your tax code for 2022-23. Please enter '0' if there is nothing shown or you did not have a PAYE code: ** If you have not paid enough tax ** If you are submitting by 30 December, owe tax for 6 April 2022 to 5 April 2023 and have a PAYE tax code, do you want us to try to collect the tax and Class 4 NICs due (if below £3,000) through your tax code for 6 April 2024 to 5 April 2025? If you are likely to owe tax for the current tax year (ended 5 April 2024) on income other than employed earnings/pensions e.g. savings or the High Income Child Benefit Charge, do you want us to use your 6 April 2023 to 5 April 2024 PAYE tax code to collect that tax during the year?