Deadline to back pay U.K. state pension approaching

[Wales4rugbyWC23]

My direct debit seems to have stopped working again. This is the second time.

Very frustrating. I guess getting them to send me a bill each year would be the safer option. I also need to backpay the gaps due to HMRC not taking my money.

Will try and call next week. I guess I should get a blog post out of it at least

I gave up on direct debit a few years ago. Never got it to work. Instead I wait for the annual letter about how much to pay for the previous year, then pay it by bank transfer. I've also had problems in the past of them not allocating the payment to my pension "account" (and not returning it either) so I always send a letter each time I pay - with lots of details - confirming I made the payment and what to do with it. The process is working well now, albeit very slowly

I have had exactly the same problems. They do seem a bit more responsive when you telephone them.

[RetireJapan]

My direct debit seems to have stopped working again. This is the second time.

Very frustrating. I guess getting them to send me a bill each year would be the safer option. I also need to backpay the gaps due to HMRC not taking my money.

Will try and call next week. I guess I should get a blog post out of it at least

I gave up on direct debit a few years ago. Never got it to work. Instead I wait for the annual letter about how much to pay for the previous year, then pay it by bank transfer. I've also had problems in the past of them not allocating the payment to my pension "account" (and not returning it either) so I always send a letter each time I pay - with lots of details - confirming I made the payment and what to do with it. The process is working well now, albeit very slowly

I just want it to work, and that sounds like the best way to do that. Thanks!

[beanhead]

My direct debit seems to have stopped working again. This is the second time.

Very frustrating. I guess getting them to send me a bill each year would be the safer option. I also need to backpay the gaps due to HMRC not taking my money.

Will try and call next week. I guess I should get a blog post out of it at least

I gave up on direct debit a few years ago. Never got it to work. Instead I wait for the annual letter about how much to pay for the previous year, then pay it by bank transfer. I've also had problems in the past of them not allocating the payment to my pension "account" (and not returning it either) so I always send a letter each time I pay - with lots of details - confirming I made the payment and what to do with it. The process is working well now, albeit very slowly

After seeing the issues Ben and others had with the direct debits I decided not to set one up.
The yearly letter exchange works well for me too.

[kuma]

My direct debit seems to have stopped working again. This is the second time.

Very frustrating. I guess getting them to send me a bill each year would be the safer option. I also need to backpay the gaps due to HMRC not taking my money.

Will try and call next week. I guess I should get a blog post out of it at least

I gave up on direct debit a few years ago. Never got it to work. Instead I wait for the annual letter about how much to pay for the previous year, then pay it by bank transfer. I've also had problems in the past of them not allocating the payment to my pension "account" (and not returning it either) so I always send a letter each time I pay - with lots of details - confirming I made the payment and what to do with it. The process is working well now, albeit very slowly

After seeing the issues Ben and others had with the direct debits I decided not to set one up.
The yearly letter exchange works well for me too.

Another manual payee here.

In addition to reasons raised by others,

* I can’t guarantee I’ll maintain the same GBP bank details for the duration of my repayments (Wise changed my EUR account details some time ago).

* No timing / communication difficulties anticipated when I want to stop the payments.

[Gareth]

I pay by direct debit every six months. Never had a problem with it. My online record is updated the same day or thereabouts. No faff at all!

But of course I will have problems now I’ve said that…!

[kuma]

On 25th Nov 2022, gov.uk published an updated version of the pamphlet NI38 'Social security abroad': https://www.gov.uk/government/publicati ... broad-ni38

The pamphlet is only available in HTML format (for now?) with Form CF83 'Application to pay National Insurance contributions from abroad' available separately within the same link as a PDF.

Form CF83 appears unchanged (the date at the bottom right of the form reads 09/19) and it still refers the applicant to the 'notes on page 31' of NI38, which is a bit nonsensical if NI38 does not have page numbers.

I haven't done an in-depth spot-the-difference between the new and old versions of NI38 (old version available as a PDF here: https://assets.publishing.service.gov.u ... 6/NI38.pdf), but at a glance spotted a couple of improvements:

* when listing the classes of NI contributions, the leaflet explains that Class 2 may be payable by some people working abroad (the previous version only referred to UK-based self-employed people; the omission of workers abroad was a big oversight given the purpose of the leaflet)

* the eligibility criteria for Class 2 and Class 3 contributions have been amended, and there is also a note for each case regarding a previous HMRC error with details of how to proceed if you have been adversely affected by this error:

HMRC error
Between 17 November 2017 and 8 April 2019, HMRC guidance was incorrect. The content in this guidance indicated that conditions 1(a) and 1(b), and 2 had to be satisfied to pay voluntary Class 2 National Insurance contributions, however as explained, you only need to satisfy conditions 1(a) or 1(b), and 2.

You may be able to pay at the original rates, if between these dates, your application to pay was refused or you relied on the incorrect guidance and you did not apply because you had not satisfied conditions 1(a) and 1(b).

To pay at the original rates read this guidance and complete application form CF83. Send it and a covering letter to HMRC using the address on the form, explaining your situation at the time

Wiki to be updated shortly to reflect the changes to the publication of NI38 and CF83.

[SZQ]

@kuma
Thanks for the update. I will try to apply for Class 2 again referring to this as a possible reason to re-evaluate my application. I satisfy all the conditions as far as I am aware but they still rejected me last time.

[kuma]

@kuma
Thanks for the update. I will try to apply for Class 2 again referring to this as a possible reason to re-evaluate my application. I satisfy all the conditions as far as I am aware but they still rejected me last time.

I see your circumstances from this post/thread: viewtopic.php?t=939

It seems that a Class 2 v Class 3 determination will hinge on 'immediately before leaving the UK you were ordinarily an employed or self-employed UK earner as everything else is watertight (3+yrs in UK / 3+yrs of contributions; currently working overseas).

The wiki notes the following:

Neither Form CF83, Pamphlet NI38 nor indeed the underlying legislation (Regulation 147 of The Social Security (Contributions) Regulations 2001) provides further definition to the Class 2 criterion of 'immediately before going abroad, you were ordinarily an employed or self-employed earner in the UK'. Applicants for whom this is not clear cut may wish to present their case on this point in their covering letter. HMRC's thinking may be akin to the 'ordinarily resident' guidance. A long work history in the UK with a short gap to prepare for an international move might reasonably satisfy the criterion (although not actually employed immediately prior to leaving the UK, you ordinarily were). Even a more extended earning gap such as a university course might satisfy the criterion (the course is time-limited, and if your prior history supports your case, you might be considered to be ordinarily employed or self-employed despite being on a study break).

I recommend presenting your case in a covering letter.

8 years of employment followed by about 2 months of preparation time before going abroad seems like a strong case for Class 2. (Although not actually employed immediately prior to leaving the UK, you ordinarily were.)

However, a grey area might be your travel period before moving to Japan. Despite being out of the UK (your second post in the thread suggests your travel was international), it is possible you would have been deemed ordinarily resident in the UK... and this travel period may then be looked at in terms of 'immediately before going abroad, you were ordinarily an employed or self-employed earner in the UK'. Did you return to the UK from your travels before moving to Japan, and if so, for how long? Did you return to the UK during your travels?

The legislation refers to when an individual 'last left' the UK:

if immediately before he last left Great Britain or Northern Ireland (as the case may be), he was ordinarily an employed earner or a self-employed earner, pay a contribution as a self-employed earner

https://www.legislation.gov.uk/uksi/200 ... n/147/made

In any case, before the 5th April 2023 deadline, it looks like you'll have 12 years eligible for back payment (2010-2011 - 2021-2022).

These would all be at the current rates, with the following exceptions:
* Class 2 contributions for the previous tax year (2021-2022)
* Class 3 contributions for the previous 2 tax years
* Anything covered by HMRC's statement relating to its error and the treatment thereof
The above would be at the original rates.

See https://www.gov.uk/voluntary-national-i ... ions/rates and https://www.gov.uk/government/publicati ... tributions

I don't think the (published!) HMRC error will come into play in your case (though of course this forum is littered with examples of other case-specific HMRC errors)...

The error was that the guidance mistakenly said that for Class 2 you have to have lived in the UK for a continuous 3-year period and have 3+ years of NI contributions when it should have read or. You fulfilled both, so won't have been disadvantaged by this error... although it is of course entirely possible that you have been disadvantaged by another error.

[SZQ]

@kuma Thank you for the detailed explanation, it really helps!

It seems unnecessarily complicated but I guess they have their reasons.

Since I left UK I have only returned once in 2019 for a week's holiday. After I left the UK I studied in Japan for about 9 months and then worked in Singapore full-time for around 5 years before starting a new job in Japan in 2018.

The rejection letter was very vague but I think you are right in that the reason for Class 2 rejection was because I was not working immediately after I left the UK. So during that period I was studying I would have been deemed ordinarily resident in the UK.

I will try one last time with a cover letter as you suggested claiming I should not be classed as ordinarily resident in the UK after I left. No harm in trying I guess.

[kuma]

Another lengthy post with some thoughts, broken down into three sections (of which perhaps the middle bit is the crux of the matter?):

=====================

For Class 2 eligibility you must have been 'ordinarily an employed or self employed earner in the UK immediately prior to departure'.

Additionally, for the periods you wish to make contributions, you must be employed or self employed abroad. 

(There is also the criterion of 3yrs+ continuous residence in the UK / 3yrs+ of NI contributions, but you've got that covered.)
 
So... if you were not deemed to be 'ordinarily an employed or self employed earner in the UK immediately prior to departure', you will be ineligible for Class 2 irrespective of your employment status abroad.

If you were deemed to be 'ordinarily an employed or self employed earner in the UK immediately prior to departure', then HMRC should look at the work history since leaving the UK that you supply as part of your application. Periods of employment / self employment would make you eligible for Class 2 for those periods. Periods when not employed would make you ineligible for Class 2 for those periods. 

So a month of unemployment between jobs in Japan could generate (for example) a UK tax year when HMRC says 11 months are payable at the Class 2 rate but 1 month is payable at the Class 3 rate.

===================================================

I'd advise presenting a positive case as to satisfying the 'ordinarily an employed or self employed earner in the UK immediately prior to departure' criterion for Class 2. Something like:

* I worked in the UK for an extended (8+ year) period following university
* I left my employment shortly prior to international travel to prepare for said travel (approx 2 months between finishing work and beginning travels)
* I travelled internationally as a once-in-a-lifetime experience (which I don't believe impinges on my 'ordinarily an earner' status; my work history pre- and post- travel demonstrates I am ordinarily an earner; such a period of travel was 'extraordinary')
* I then formally moved internationally -- firstly to Japan, then to Singapore, then to Japan again -- as my address/work history demonstrates
* since my last employment in the UK, I have almost exclusively been resident abroad, and whilst in the UK I think it is indisputable that I was 'ordinarily an employed earner' (my extended earning record only ceased to prepare for 'extraordinary' travel)

[+ your point about only returned once to the UK since leaving
+ any other supporting statements]

===========================================================================

Which date are you using as the one when you left the UK? The date when your international travel started or the date when you first moved to Japan?

NI38 opens by saying "If you’re going abroad..." (not moving abroad)
CF83 has a section entitled 'About your absence abroad'

I can't see any clear guidance about which date to use...

Logically, during your international travel (after finishing your UK work), you were not contributing to the UK social security system, but had satisfied the 3+yr residency/3+yr contribution rule to contribute voluntary from abroad via Class 3 if you so wished (which may not have been top of the agenda at the time... and may have required lots of updates of addresses to HMRC if you were constantly on the move). If your 'abroad' period could have started from the travel period in the case you chose to pay Class 3s, is there any reason it cannot be deemed to have started then if you now wish to apply for Class 2s (for more recent tax years)?

[Sorry if that's further complicating things... for the prize of Class 2s, I'd say it's definitely worth a shot at a covering letter presenting your case, and to me the key point is whether you were deemed to be ordinarily employed in the UK immediately prior to departure.]