HMRC demanding a voluntary tax contribution!

! This post hasn't been updated in over a year. A lot can change in a year including my opinion and the amount of naughty words I use. There's a good chance that there's something in what's written below that someone will find objectionable. That's fine, if I tried to please everybody all of the time then I'd be a Lib Dem (remember them?) and I'm certainly not one of those. The point is, I'm not the kind of person to try and alter history in case I said something in the past that someone can use against me in the future but just remember that the person I was then isn't the person I am now nor the person I'll be in a year's time.

Mrs Sane registered as self employed earlier this year for her Scentsy business.

Like most small businesses, she had start-up costs and is putting pretty much all of her profits back into the business so she won’t have any taxable income for at least a couple of years.  So it was a surprise to get a letter from HMRC today demanding £60 of National Insurance contributions.

I called them up for her and asked how she could be liable for National Insurance with no taxable income.  Or no salary at all, in fact.  The answer was that regardless of whether she has any taxable income, she is still liable for £2.50 per week National Insurance contributions to ensure she is eligible to receive benefits and to go towards a state pension.

She doesn’t claim benefits and there will be no such thing as a state pension by the time we’re old enough to retire so I asked if it was a voluntary contribution.  He told me that it wasn’t voluntary but she could opt out of paying it if she has a taxable income of less than £5k per year.  So … that would be voluntary then?


  1. Geoff, England (22 comments) says:

    HMRC are like pelicans and penguins – they can all shove their bills up their arses.

  2. Stan (222 comments) says:

    You have to wonder how much it costs in admin to collect that £60

    I used to work for the National Insurance office way back in the mists of time. Back then, after a company survey the contributions were worked out to the penny. Once it was merged with the tax office we had to use their methods so calculations were “rounded” to make them easier. This meant that a small company might be better off by a couple of quid, whereas a larger company would have a write-off of many thousands of pounds. God knows how much multi-nationals were let off paying.

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