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Retiring but want to work!


Madhatter
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There are several types of NIC, I have paid some or all of them over the years, I recall that during a period of self employment I paid a small fixed weekly contribution known in the past as "paying your stamp" and then a percentage of the declared profits.

When I ran a limited company I showed a minimal salary on the books, in fact I never drew it, the cashflow would not allow such extravagance, IIRC it was over the NIC threshold but under my income tax personal limit, I would do the declaration every month and pay the NIC due, I did not realise that it was the type (1,2 or whatever) for the health system but not the retirement system, I would draw dividends once or twice a year again according to the cashflow and pay advanced corporation tax on it, some years due to cashflow I could not even draw any dividend but nonetheless declared one commensurate to the auditted net profit and once even had to borrow the money to pay the corporation tax.

It was during that time that I lost 4 contribution years, I had no employees to pay but if I had so life would have been even more difficult, for me the OP has not broken any laws and should not be criticised, like me he will pay the price during his retirement years for the lack of contributions, those who have sat on the dole all their lives will pick up the full packet regardless.

I would be interested to know what are the different types of NIC contributions, what they entitle one to and what type of earnings they are levied on, I believe and stand to be corrected that investment income which effectively is what paying oneself a dividend is does not qualify for the OAP type of contributions, nor does rental income on its own.

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[quote user="Chancer"]

There are several types of NIC, I have paid some or all of them over the years, I recall that during a period of self employment I paid a small fixed weekly contribution known in the past as "paying your stamp" and then a percentage of the declared profits.

When I ran a limited company I showed a minimal salary on the books, in fact I never drew it, the cashflow would not allow such extravagance, IIRC it was over the NIC threshold but under my income tax personal limit, I would do the declaration every month and pay the NIC due, I did not realise that it was the type (1,2 or whatever) for the health system but not the retirement system, I would draw dividends once or twice a year again according to the cashflow and pay advanced corporation tax on it, some years due to cashflow I could not even draw any dividend but nonetheless declared one commensurate to the auditted net profit and once even had to borrow the money to pay the corporation tax.

It was during that time that I lost 4 contribution years, I had no employees to pay but if I had so life would have been even more difficult, for me the OP has not broken any laws and should not be criticised, like me he will pay the price during his retirement years for the lack of contributions, those who have sat on the dole all their lives will pick up the full packet regardless.

I would be interested to know what are the different types of NIC contributions, what they entitle one to and what type of earnings they are levied on, I believe and stand to be corrected that investment income which effectively is what paying oneself a dividend is does not qualify for the OAP type of contributions, nor does rental income on its own.

[/quote]

 

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