Tuesday 18 March 2025: Easing back in?

I had hoped to be back on light duties yesterday, starting with a blog post and a bit of writing. My plans, however, went down the drain due to a couple of slightly worrying issues with my tax record. And I ended up spending the best part of 2 days sorting it all out.

It began with a demand from HMRC (His Majesty’s Revenues & Customs) for £6.55 (less than $10) relating to voluntary National Insurance contributions. I initially thought yay! they’ve finally seen that I’ve ticked the box on my tax return. And I was just going to pay it. I mean, £6.55? Why not? Then I saw the period to which this contribution related…

April 1988.

Read that again.

April. Nineteen Eighty-Eight.

Now, you must forgive me for not being on the ball straight away. I mean, I was still convalescing from an operation I hadn’t wanted. I was tired. I was weary. And I wasn’t firing on all cylinders. 

I’d already embarked on a webchat on Saturday to ask about this strange request, but she couldn’t help me and asked me to phone the help line on Monday. And on Monday that’s what I did.

But there’s this Big Thing happening in the UK at the moment to do with National Insurance contributions (NICs), and that is that a lot of us are able to give our state pension a bit of a boost providing we meet the necessary criteria and make the necessary application by 5 April 2025. If we spend hundreds now, we will get thousands in our state pensions. And a LOT of people have taken the government up on this.

To the extent that the webchat at HMRC is now broken and call waiting times are up to an hour. 

But I made my call, and I waited 50 minutes for someone to answer. And after a deal of to-ing and fro-ing, the operator I spoke to said that my employee (NOT self-employed) NICs for 1988 were indeed fully up to date, there were no gaps for me to fill, but this £6.55 had somehow become due and if I didn’t agree, then I should write a letter.

He said it was Class 2 NIC for self-employment, and then said that I was in fact fully employed at the time on PAYE (Pay As You Earn) for that year and my employer had paid my Class 1 compulsory employee’s NIC IN FULL. But he said it was something to do with self-employment and I had to pay this bit extra.

This is where the alarm bells started to ring.

Class 2 NICs are voluntary. And they are for the self-employed.

If I was fully employed, and my NICs were fully paid up, why did I have to pay this self-employed element when it’s voluntary anyway?

When we ended the call, the first thing I did was start to plough through all of my evidence to see what I was doing in April 1988. I was working for a city council at the time, and had been for 2 years already, with another year yet to serve. I didn’t go self-employed until 1991. Three years later. 

So I went through all of my backups, all over the place, from PC to Mac, since about 1998, and collected it all together into one directory on the current desktop. Anything before that should be a crate in the shed. That’s a lorra-lorra e-paperwork. And it took me almost the entire day.

I also did some legal searching, to see what the statute of limitations is on tax and NIC collections. For the record, it can be up to 20 years for tax, or indefinitely if they suspect serious foul play, but it can only be 6 years for NICs. (And I checked it all against the actual Limitation Act of 1980.) So the statute of limitations for that £6.55 from 1988 EXPIRED in 1995. 

Once I was satisfied that something was seriously amiss, I put that to one side and then thought I’d best get a jimmy on if I wanted to boost my state pension before the cut-off date. I’d already had my interviews with the future pension people and I’d already seen the options they gave me. But when I went to see if I wanted to pay for one of those options, there they were gone.

And the cut-off date is in less than 3 weeks.

Wondering where my options were, I jumped straight onto the webchat – the webchat that was working fine on Saturday. 

Computer said No. The webchat wasn’t available.

So today, I got up early so that I was on the phone as soon as the lines opened. And already they were warning about a 60-minute wait on the phones. I got most of the way through when the HMRC computer suddenly stopped working and my call was terminated. I tried again, and got all the way to an operator, who said she could still see the 3 options I’d been given at her end, but HMRC had made some kind of alteration to my record that meant I had to get back in the loop before I could see them again, and here was the number I should try…

I thanked her, called the other number, also with 60-minute waiting times, got all the way through to an operator, but she couldn’t hear me. I tried again, and this time I got all the way through again, but the line was very crackly at her end. But we persevered, and I finally got to talk to someone who had actual knowledge about what she was there for.

Oh, how we laughed about the 37-year-old demand for payment. I’m sure she didn’t believe me until she was able to pull it up on her system and see it with her own eyes. Then she couldn’t believe that they’d actually sent it out. For a start, she said, it should have been written off 31 years ago. (THIRTY-ONE YEARS AGO!) And then she said, “But your year is full for then anyway. And all the years around it!” Tell me about it!

Unfortunately, she said, if she’d taken my call the day before, the only advice she would have been able to give me was also to write a letter. So we discussed for a while whether I should open my letter with ‘the statute of limitations has already expired’ or ‘I don’t owe it anyway’. 

And then we got on with my pension contributions…

The upshot is that despite me completing self-assessments since 1991, and despite me qualifying for government furlough during the pandemic as a small business, they didn’t actually have me registered as self-employed. And this had come to light approximately 6 months ago when I first sent out feelers about these extra NICs we can pay for, and when my options very clearly came up on the screen.

Back then, the poet and I discussed it and decided the 8^th year wasn’t really worth it, but that I’d still think about paying the remaining 7 years.

Well, this wonderful lady had great news. The first lady had already told me that I should only buy back the cheapest 7 years anyway, and only those years after 2017/2018 tax year. The second lady said that now I was registered as self-employed (that’s why my options vanished) and all my other tax and NIC payments were taken into account, I was only £50 per week short of the standard state pension forecast. 

But I don’t qualify for the voluntary Class 2 NICs now. Instead, I qualify for voluntary Class 3 NICs, which are considerably cheaper than the Class 2s! And if I buy back only 7 years, my forecast will only be about £2 short of the standard forecast. Well, I snapped her hand off! She gave me the bank account details and a reference number. And I paid it. 

Oh, and by the way, the webchat had actually been TURNED OFF by HMRC. The phone lines say to contact them via the webchat, but the webchat wasn’t even on, let alone working!

Anyway, I thanked her warmly, wished her a good day, and when we hung up I started to draft the letter in response to the Class 2 NICs demand. I decided to lead with the statute of limitations, added in the fact that the year in question was already fully paid, and finished with the fact that I wasn’t even self-employed at the time. 

And that, my friends, is about all I’ve managed today too. 

So much for easing myself back in!

Tomorrow will, hopefully, be back to normal.