Pension contribution years
Discussion
Client just brought this up, and to my knowledge it seems obsurd, but I said I would have a look.
Say a 16 year old went out to work full time.
Now say at age 46 he has a full 30 years pension record, entitling him to full state benefits at retirement age, therefore, technically, he doesn't need any further contributions, and will receive the full state pension come retirement.
It's been suggested he shouldn't have to pay any further national insurance on his PAYE employment, and therefore table C applies. I've looked at the HMRC flowchart, and this doesn't entertain what he's saying at all.
But at the same time, I can see his logic, just don't think it's something the revenue would let happen, much as they would continue to expect tax.
Say a 16 year old went out to work full time.
Now say at age 46 he has a full 30 years pension record, entitling him to full state benefits at retirement age, therefore, technically, he doesn't need any further contributions, and will receive the full state pension come retirement.
It's been suggested he shouldn't have to pay any further national insurance on his PAYE employment, and therefore table C applies. I've looked at the HMRC flowchart, and this doesn't entertain what he's saying at all.
But at the same time, I can see his logic, just don't think it's something the revenue would let happen, much as they would continue to expect tax.
No idea as to the answer but I'd guess that the HMR&C's position will be that the obligation to pay NI contributions (which as we all know is just a tax like any other, and it not hypothecated to pay for an individual's own benefits) is entirely seperate and distinct from the criteria that are applied to determine entitlement to a benefit, hence it's irrelevant as to whether he has already accumulated enough years contributions.
Full marks to him for trying though!
Full marks to him for trying though!
Lurking Lawyer said:
No idea as to the answer but I'd guess that the HMR&C's position will be that the obligation to pay NI contributions (which as we all know is just a tax like any other, and it not hypothecated to pay for an individual's own benefits) is entirely seperate and distinct from the criteria that are applied to determine entitlement to a benefit, hence it's irrelevant as to whether he has already accumulated enough years contributions.
Full marks to him for trying though!
This was entirely my thoughts, but when confronted with an entirely plausible 'avoidance' measure, it's always worth checking. I'm going to phone HMRC as an employee and not an accountant to ask though Full marks to him for trying though!
thewave said:
Client just brought this up, and to my knowledge it seems obsurd, but I said I would have a look.
Say a 16 year old went out to work full time.
Now say at age 46 he has a full 30 years pension record, entitling him to full state benefits at retirement age, therefore, technically, he doesn't need any further contributions, and will receive the full state pension come retirement.
It's been suggested he shouldn't have to pay any further national insurance on his PAYE employment, and therefore table C applies. I've looked at the HMRC flowchart, and this doesn't entertain what he's saying at all.
But at the same time, I can see his logic, just don't think it's something the revenue would let happen, much as they would continue to expect tax.
I would be interested in what they say as I am in that boat but now pay myself in share dividends and pay very little NI, haing paid them for about 28 years, so it is within my grasp (and many others I think?).Say a 16 year old went out to work full time.
Now say at age 46 he has a full 30 years pension record, entitling him to full state benefits at retirement age, therefore, technically, he doesn't need any further contributions, and will receive the full state pension come retirement.
It's been suggested he shouldn't have to pay any further national insurance on his PAYE employment, and therefore table C applies. I've looked at the HMRC flowchart, and this doesn't entertain what he's saying at all.
But at the same time, I can see his logic, just don't think it's something the revenue would let happen, much as they would continue to expect tax.
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