Tuesday, 26 March 2013

It's been a hectic year so far

Is it just me or is this year absolutely flying past? Looking back at plans I made in January for things to do by the end of the year I've going to be lucky to fit them all in.

Have definitely decided to go ahead with the motorbike licence, it's something I've always wanted to do and the office move to somewhere with limited parking has helped seal the decision. I think I'll wait till there's less snow on the ground though - we aren't moving until October so I've got plenty of time to do the licence, find a bike and get some experience during the "summer" months.

I think I've managed to get the balance of salary and company benefits so that I'm pretty much on the threshold for starting to have to pay back child benefit. A lot of people say that someone on a salary this high shouldn't need it but due to high payments for debt maintence (some of it due our own stupidity admittedly) having to pay back most or all of it would make a big difference. Luckily some of the debts will finish next April, and so from then on we'll probably opt out of having child benefit altogether.

NOTE: The below relates only to the tax system in the UK.

One thing I've found which hasn't been as well known is that if the person claiming child benefit doesn't work, and then opts out either because their partner will earn over 60k or just because they want to save the hassle of self assessment, is National Insurance credits. HMRC have said in this situation they will still add credits but it's worth checking that they do as it's hard to get them added retrospectively after a certain amount of time.

Basically National Insurance contributions or credits determine how much state pension you're entitled to when you retire. You have to have 30 qualifying years for a full state pension although as long as you have even 1 year you will get something.

A qualifying year is a year during which you either paid a certain amount of NI or were given a certain amount of NI credits from HMRC. These credits are normally paid for people not working and paying NI contributions, but they won't necessarily know you need them. The most common way that they know to credit you is if you claim certain benefits, e.g. Job Seekers Allowance, Child Benefit etc.

You can apply online for a NI statement of account (this link takes you to the section on the HMRC website) going back as long as you need from HMRC for free. It's worth doing this just to check it's all up to date, especially if you've had gaps in your working history and after stopping a claim for Child Benefit if you plan to do this. It also tells you how many years you have left to get up to full pension entitlement, and what to do if you have any incomplete years.

No comments: