Post
by AccountantMatthew » Mon Aug 15, 2011 9:15 am
I know I’m going off topic a little here but here are a couple of notes on presumably why the self employed have to show part of their NI contribution:
When self employed you pay different classes of National Insurance to when you are an employee/officer - so you pay class 4 NI on profits and class 2 NI which is a flat rate paid weekly (and which you have to show on your application). When employed, you pay class 1 NI.
Class 4 NI is paid through your self assessment return, which you need to complete when self employed if given notice to do by HMRC - so you can prove that you pay your that class of NI if required.
However with class 2 NI, you have to separately arrange to pay that with HMRC so I'm assuming that class 2 proof gets asked for by UKBA so that you can demonstrate that you comply with all tax/NI requirements.
With salary and dividends you will pay tax/NI via the PAYE system through the calculation of your pay via your payslip. Any tax payable on dividends will usually be paid through you filing a self assessment tax return.
However if there is no tax or NI to pay on your income level then at least from a tax compliance point of view you are doing nothing wrong - the main thing is that you are paying the correct amount. UKBA look at the income levels so if you happen to structure your income to maximise your tax efficiency and pay no tax or NI then fair enough!
Please don't private message me or e-mail me for free personal advice - you are just wasting your time writing something that won't get answered.
Anything written here shouldn't be construed as being formal advice given in a professional capacity.