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Where Taxpayers and Advisers Meet

Class 2 or Class 3? Help !!

FloopyPooples
Posts: 6
Joined: Wed Aug 23, 2017 5:37 am

Class 2 or Class 3? Help !!

Postby FloopyPooples » Tue Jan 15, 2019 12:00 pm

Hi everyone.

I have searched and searched and I cannot find the answer as to what the difference is between Class 2 and Class 3 voluntary contributions are.

In a nutshell.
I left the UK in 2010 and I want to pay off my yearly NI gaps I have accrued (yes I know I can only go back and do 6)

While being away, I have not worked for any company with ties to the UK, nor have I been paid into a UK bank account.
I have also never been self employed.

Can anyone help as to whether I should be ticking the class 2 box or the class 3 box on the CF83 form !!

- Cheers

pawncob
Posts: 4372
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Class 2 or Class 3? Help !!

Postby pawncob » Tue Jan 15, 2019 12:49 pm

You can only make Class 3 contributions (voluntary). Class 2 is for Self Employed.
With a pinch of salt take what I say, but don't exceed your RDA

FloopyPooples
Posts: 6
Joined: Wed Aug 23, 2017 5:37 am

Re: Class 2 or Class 3? Help !!

Postby FloopyPooples » Wed Jan 16, 2019 3:04 am

Thanks man.
I wish it said it that simply on the gov.uk site. :D

etf
Posts: 610
Joined: Mon Nov 02, 2009 5:25 pm

Re: Class 2 or Class 3? Help !!

Postby etf » Mon Feb 04, 2019 12:07 pm

Suggest you take a look at booklet NI38 which covers voluntary class 2 NICs. Wherever possible (there are conditions to meet) expatriates should opt for Class 2 over Class 3 as they are much cheaper and historically have provided an entitlement to a wider range of benefits (although not sure whether this applies with IDS' changes to the benefit system).

The above is ingrained in my memory as I remember meeting an expat who had been paying the more expensive class 3 contributions. He had suffered a heart attack overseas and was refused a benefit he would have received had he paid the cheaper class 2. Enough to trigger a 2nd heart attack isn't it!

JOHNRE
Posts: 69
Joined: Sat Feb 06, 2016 2:03 pm

Re: Class 2 or Class 3? Help !!

Postby JOHNRE » Wed Feb 13, 2019 10:04 am

It is certainly possible to pay voluntary a Class 2 contributions whilst you are working overseas. I act as my son’s Agent because he has been living and working overseas for over two years. Our claim was initially turned down (there is a special form at the end of NI38)....however, once I had proved that his NI record was not “sparse” and he had been paying NI immediately before he left....it was accepted. Now he only had to pay about £150 a year and gets a state pension in due course. Was well worth doing, although dealing with HMRC can be both time-consuming and stressful!

etf
Posts: 610
Joined: Mon Nov 02, 2009 5:25 pm

Re: Class 2 or Class 3? Help !!

Postby etf » Wed Feb 13, 2019 10:31 am

Was well worth doing, although dealing with HMRC can be both time-consuming and stressful!

Especially now as HMRC's NIC helpline has been 'temporarily' unavailable for at least 12 days. This poor service has been rewarded with the boss becoming Sir Jon. Think my vote would have gone to Gordon for that save in 1970. Be nice to get the gong decision makers and place them in the village green stocks to provide some feedback regarding the absurdity of some of their choices.

FloopyPooples
Posts: 6
Joined: Wed Aug 23, 2017 5:37 am

Re: Class 2 or Class 3? Help !!

Postby FloopyPooples » Sun Mar 17, 2019 11:47 am

Actually it DOES look like I should be asking for Class 2.

In form NI38, next to class 3 it says one of the requirements for paying Class 3 is....
if you have paid Class 1 NICs for the first 52 weeks of your employment abroad

Which I did not as according to the information on this page....
https://www.gov.uk/national-insurance-if-you-go-abroad

... you only have to do if you meet 3 conditions. One of which is your employer has a place of business in the UK, which they did not.

etf
Posts: 610
Joined: Mon Nov 02, 2009 5:25 pm

Re: Class 2 or Class 3? Help !!

Postby etf » Mon Mar 18, 2019 10:18 am

If you are entitled to pay the cheaper Class 2 voluntary NI contributions, I'd suggest that should be your choice.

Don't expect to receive a quick reply as I've been advised HMRC are currently taking 8 weeks to respond.


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