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Qualifying years for National Insurance

Last year I incorporated my business and I now draw a small monthly salary and quarterly dividends, which means I do not have to pay any tax or National Insurance. Should I be paying National Insurance to protect my rights to state pension and benefits?

National Insurance is charged on income from employment when the earnings exceed £110 per week. However, if your earnings are above the Lower Earnings Limit (currently £97 per week) you are still credited with a qualifying earnings period for state pension and benefits.

If your earnings fall under the Lower Earnings Limit, you can consider making voluntary National Insurance Contributions.

Certain individuals may also be entitled to National Insurance credits where they have not been earning due to caring for a younger child or disabled person, or where they are an approved foster carer. There are also credits available for people in receipt of certain state benefits.

You have not stated your age, but if you are concerned about your state pension, you should apply online for a forecast at www.direct.gov.uk.

If you would like any more information, please feel free to contact your local TaxAssist Accountant. 

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0800 0523 555

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