'Lecturers, teachers or instructors' are no longer included in the list of occupations for NIC purposes covered by Social Security (Categorisation of Earners) Regulations 1978. Normal employment status rules apply.
The 'CWG2(2012) Employer further guide to PAYE and NICs' Chapter 1 Page 5 has been updated to reflect the changes.
CONFIRMATION OF YOUR NATIONAL INSURANCE NUMBER
12 September 2012
HMRC has introduced an electronic version of form CA5403 so you can now email to ask for written confirmation of your National Insurance number.
Emailing HM Revenue & Customs for written confirmation of your National Insurance number
IMPORTANT INFORMATION FOR SLEEPING AND INACTIVE LIMITED PARTNERS ABOUT THEIR LIABILITY TO PAY CLASS 2 AND 4 NATIONAL INSURANCE CONTRIBUTIONS.
5 April 2013
HMRC now considers that Sleeping and inactive Limited Partners are-and have in the past been-liable to pay Class 2 National Insurance contributions (NICs) as self employed earners and Class 4 NICs in respect of their taxable profits. "Inactive Limited Partners" are Limited Partners who take no active part in running the business. This view represents a change from that previously held by HMRC and the Department for Work and Pensions.
What happens next?
Sleeping or inactive Limited Partners who have not paid Class 2 or Class 4 NICs for a past period will not be required by HMRC to pay those contributions.
Payment of Class 2 NICs from 6 April 2013
HMRC now take the view that Sleeping and inactive Limited Partners are liable to pay Class 2 NICs because they are "gainfully employed" as self employed earners for the purposes of section 2(1)(b) of the Social Security Contributions and Benefits Act 1992 because: - "Employment" as defined in section 122 of the Social Security Contributions and Benefits Act 1992 includes business and section 1(1) of the Partnership Act 1890 provides that "Partnership is the relation which subsists between persons carrying on a business in common with a view of profit"; and Section 2(1)(b) of the Social Security Contributions and Benefits Act 1992 imposes no requirement that partners have to be active in the business. Class 2 NICs is a weekly liability which will be due from 6 April 2013 unless a Sleeping or inactive Limited Partner is either under 16, over pension age, is granted the Small Earnings Exception, is a married woman or widow with reduced liability, or claims deferment on account of other employments. It will therefore be necessary for Sleeping and inactive Limited Partners to check their Class 2 NICs position. Sleeping and inactive Limited Partners who are not already paying Class 2 NICs as a result of being self employed must advise HMRC of their self-employed status and arrange to pay NICs or seek exception/deferment, etc, according to their individual circumstances. Many Sleeping and inactive Limited Partners will qualify under one of these exceptions but there is a need to ensure that the appropriate action has been taken.
CIPP Policy News Journal
12/04/2013, Page 134 of 362
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