National Insurance Question

My client, who is self employed has received a bill for £782 NI arrears owed from prior to July 2010 (the bill isn’t any more specific than that).

In general terms, will paying this bill increase his liklihood of getting contribution benefits. His business is failing and he is thinking of claiming ESA imminently; he’ll not get the means tested version as his wife works FT.
Thanks for any help or guidance you can offer

Best wishes

Dan

Hard to say without knowing whether it relates to Class 2 (basic self employed) or Class 4 (profit-linked) or both. I suspect that there is Class 4 in there somewhere, because class 2 is still only £2.40 a week, so £700-worth would be many years at that rate.

This matters because only Class 2 contributions carry entitlement to benefits: Class 4 is income tax under another name and is usually assessed side by side with income tax liability.

Does your client not have any records (eg bank statements) that would help to establish what the demand relates to and for what period?

He needs to request a breakdown of years due for and class of NI.

You’d also want to read through the summary on ‘late payment of contributions’ in CPAG Handbook (pages 751-3)

Six week wait required, at least.