Class 2 NI Contribution for IT Contractor

[jamesbrown]

Strictly speaking it appears you are wrong here.

From HMRC site

1. What’s your work status?
Director of a company

Change this answer

Based on your answers you have to fill in a Self Assessment tax return
1. Register for Self Assessment if you aren’t already registered.
2. Check the deadlines for when you have to send your return.
3. Send your tax return online

Strictly speaking, TCP is correct, based on the actual legislation (s.7 TMA 1970, Notice of Liability to Income Tax and Capital Gains Tax), but registration is HMRC policy and it's probably not worth an argument. Note the critical point: chargeable to tax.

[drumtochty]

If your accountant ballsed this up he should certainly be helping you sort it out. You should be able to unregister. Strictly speaking you don't need to register for self assessment either unless you are chargeable to tax although a lot of accountants do this for company directors anyway.

Strictly speaking it appears you are wrong here.

From HMRC site

1. What’s your work status?
Director of a company

Change this answer

Based on your answers you have to fill in a Self Assessment tax return
1. Register for Self Assessment if you aren’t already registered.
2. Check the deadlines for when you have to send your return.
3. Send your tax return online

[TheCyclingProgrammer]

If your accountant ballsed this up he should certainly be helping you sort it out. You should be able to unregister. Strictly speaking you don't need to register for self assessment either unless you are chargeable to tax although a lot of accountants do this for company directors anyway.

[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

[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)

[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.

[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.

[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]

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.

[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.

[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.

[stek]

What does your accountant say?

[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