Can NICs application cause a residency challenge?

[IloveJapan]

Hi guys,

I’ve lived In this lovely country Japan the past thirty years. I’ve been wondering if an application to pay voluntary National Insurance contributions has ever been known to lead to a residency challenge by HMRC?

I sometimes read expat financial sites, and a lot of them say that UK expats living abroad are sometimes known to receive a residency challenge, in which HMRC will claim they have been a UK resident for tax purposes for many years, and requiring them to find huge amounts of evidence to prove that they are indeed non-resident?

I have lived in Japan constantly, and have never been back to visit the UK except once near the beginning of my stay in Japan. Also, I never bought property or any investments in the UK. So rationally speaking, there is no way I would be considered UK resident. But my past includes:

1) Some large employment gaps and a long time spent looking for work when I first came to Japan.
2) The fact that I didn’t contact the authorities to say I was leaving the UK (apparently there is a form people fill in, the P85 or sth, but it may not have even existed when I left). I’ve done a few things like renew my passport, request birth certificates etc. but by and large I have not communicated much over the years.
3) A period of a few months during my first two years inJapan, where I was ill and went back to the UK for a four-month period that spans two tax years.

And when people do an application to do voluntary payments, they have to give a huge amount of information on their employment history, don’t they? So what do you guys think?

[Tkydon]

I think, if you want to claim Class 2 Contribution eligibility, you just have to prove you were employed for that period of time.
For periods on unemployment or self-employment, I think you can only qualify for Class 3 contributions, so they will need your Work History = CV ...

[TunaSki]

No, it won’t. Not for honest people anyway. because you’re applying to pay voluntary contributions as an overseas resident.

The only time it might cause some issues is for dishonest people trying to commit fraud or trying to utilize UK resident services while simultaneously declaring themselves as a non-resident of UK to make voluntary contributions as an overseas resident.

For example, if someone is illegally renewing their UK driving license as a non-resident of the UK, or if someone is illegally contributing to an ISA/LISA as a non-resident of the UK. Or someone trying to illegally use free NHS healthcare as a non-resident of the UK. Then it’s not going to look good for them if they get caught stating they are UK resident for those services, but then contradict themselves by stating they are a non-resident for voluntary contributions.

[IloveJapan]

Thank you for your feedback!

So I wonder what class (2 or 3) a person would receive if they were doing say:
A) A part-time job
B) A collection of part-time jobs
C) Freelance work

Th other thing is I may no longer have physical proof (like payslips) of employment that happened a really really long time ago (in fact some firms even went bankrupt), so two things I should ask are:

1) How much proof of employment (documentation) do people need to prepare the application?
2) Do people have a choice of giving employment information for just the years they are interested in claiming the pension for, or alternatively just a certain number of years dating back from today? Because to me providing 30 years of past info including FT, PT and freelance seems way too much! In fact people can only claim for years from about 2006 anyway!

[Deep Blue]

They have access to your NIC payment history to determine whether you should pay class 2 or 3 contributions.

[beanhead]

Thank you for your feedback!

So I wonder what class (2 or 3) a person would receive if they were doing say:
A) A part-time job
B) A collection of part-time jobs
C) Freelance work

Th other thing is I may no longer have physical proof (like payslips) of employment that happened a really really long time ago (in fact some firms even went bankrupt), so two things I should ask are:

1) How much proof of employment (documentation) do people need to prepare the application?
2) Do people have a choice of giving employment information for just the years they are interested in claiming the pension for, or alternatively just a certain number of years dating back from today? Because to me providing 30 years of past info including FT, PT and freelance seems way too much! In fact people can only claim for years from about 2006 anyway!

The current wording for class 2 is in this link below. It used to say something like 'ordinarily in full-time employment immediately before leaving the UK'.
https://www.gov.uk/voluntary-national-i ... tributions
Based on this, I would suggest that your examples A) to C) would probably give a result of Class 3.
I don't work at HMRC, however, so the only way to find out is to make the application.

Regarding documentation, I didn't send any. I also had some employers which I couldn't remember the details of. I just wrote down what I could in a covering letter. The key timing is immediately before leaving the UK and immediately after. You need to have been working full-time at these times for Class 2, it seems.

[IloveJapan]

Hmm, well there are certainly people who maybe get sent over by their employer to work in Japan, so I guess they start full-time from day one, but many people come as a spouse of a Japanese person and look for work or come by themselves and look for an employer, so only people in the first case would be eligible for class 2?

[RetireJapan]

Hmm, well there are certainly people who maybe get sent over by their employer to work in Japan, so I guess they start full-time from day one, but many people come as a spouse of a Japanese person and look for work or come by themselves and look for an employer, so only people in the first case would be eligible for class 2?

I recommend applying for Class 2 and seeing what they say.