Posts Tagged ‘NI’
Petition to make NI fairer for freelancers
I’ve started this petition because right now, the system is set up something like this:
So, you’re freelance? You can’t get contributory (non-means-tested) Jobseekers Allowance should you need to sign on as you don’t have two years’ of Class 1 NI contribs. It doesn’t count if you had years and years of Class 1 contribs before you went freelance. They now count for nothing. A millionaire who’s just been made redundant and is married to a billionaire? They can have six months of non-means-tested benefits. You? Sorry, computer says no.
You can’t get non-means-tested Jobseekers. If your partner works, you probably can’t get the means-tested kind. You can’t qualify by paying the optional Class 3 top-up as that doesn’t count towards contributory benefits. You can’t opt to pay Class 1, you have to do some casual work and wait to hit the primary threshold (£110 a week, so you’re going to hit it on day 1).
If you pay Class 1 on sporadic casual work, you still can’t get contributory benefits as you don’t have two solid years’ contributions. You also can’t get the money back. So your Class 1 payments go into a black hole labelled “Class 1 NI: qualifies other people for contributory benefits, in your case we’ll just have the cash, thanks.”
HMRC says you should buy income protection insurance, which may be easier said than done (some of us have health problems and are liable to face high premiums). HMRC also doesn’t do enough to explain all this to people. I have been asking freelancers if they understand what benefits they would and would not qualify for. Most of them got it wrong.
As it says on the petition (which only gave me 1,000 characters to explain the whole thing) I think we should be able to get those sporadic Class 1 payments back (or not make them) given they don’t count, and I think we should be able to pay towards contributory benefits, and I think the whole system needs looking at from a sole trader’s point of view.
My MP has also written to Alistair Darling (or at least his office has) so I’ll report back with any response.
