Class 2 NI Contribution for IT Contractor

[computerguru]

Hello guys,

Does an IT contractor working as a Limited company director (n drawing a salary of £640/month) has to pay class 2 NI contribution. I have gone through this document & what I understand is, Limited company director should not pay class 2 NI contributions.

Can anybody please confirm? Also, If my understanding is correct,

1. how can i notify HMRC about this as I have received a letter today to pay class 2 NI contribution.
2. and why i have received this letter. Just trying to understand if there is any mistake made by my accountant or something?

Many thank for ready and your help

Thanks

[stek]

What does your accountant say?

[TheCyclingProgrammer]

No class 2 NIC unless you are registered as self employed. Are you?

If not then it's likely an error. Ring HMRC and put them straight or even better, get your accountant to sort it out.

[LisaContractorUmbrella]

If you are registered with HMRC as a sole trader then, yes, you will pay Class 2 NIC's. If you have set up a Limited Company then Class 1 NIC's are payable on the salary drawn (as opposed to dividends taken) but the amount you are taking falls under the threshold anyway so nothing due.

[computerguru]

What does your accountant say?

Thanks for useful reply. Much appreciated

No class 2 NIC unless you are registered as self employed. Are you?

If not then it's likely an error. Ring HMRC and put them straight or even better, get your accountant to sort it out.

If you are registered with HMRC as a sole trader then, yes, you will pay Class 2 NIC's. If you have set up a Limited Company then Class 1 NIC's are payable on the salary drawn (as opposed to dividends taken) but the amount you are taking falls under the threshold anyway so nothing due.

As far as I am aware, I am not registered as self employed or sole trader. I am a director of a limited company with 100% share holder.

[Maslins]

As far as I am aware, I am not registered as self employed or sole trader. I am a director of a limited company with 100% share holder.

Sounds as though HMRC are confused on this.

There's a difference between being registered for self assessment (which most director/shareholders will need to do) and registering as self employed (which they don't). I'd guess you/your accountant have done the latter by mistake.

[computerguru]

Sounds as though HMRC are confused on this.

There's a difference between being registered for self assessment (which most director/shareholders will need to do) and registering as self employed (which they don't). I'd guess you/your accountant have done the latter by mistake.

Thanks for replying. How can i confirm this from HMRC? Is there any website where I can check this? I am trying to call HMRC on 0300 200 3505 but "they are very busy" and just disconnects my call.

[ASB]

Thanks for replying. How can i confirm this from HMRC? Is there any website where I can check this? I am trying to call HMRC on 0300 200 3505 but "they are very busy" and just disconnects my call.

I would naturally say "with a phone". But as you have found out it is not necessarily that easy. Is there any different number on the letter you can try. Or possibly any enquiry number on HMRC website. The problem is I suspect they all get routed in the same direction.

[LisaContractorUmbrella]

The best way to deal with an HMRC cock up, in my experience, is to write to them and then keep a copy of the letter that you send - it usually takes a while to get a reply but then, if you have something in writing, you are better placed to deal with them if the issue arises again (which is, unfortunately a possibility)

[computerguru]

I would naturally say "with a phone". But as you have found out it is not necessarily that easy. Is there any different number on the letter you can try. Or possibly any enquiry number on HMRC website. The problem is I suspect they all get routed in the same direction.

Thanks again. I managed to speak to HMRC and they said I am registered as self employed. I will now speak to my accountant to see why he has registered me as self employed and will try to revert it.

Thanks