Confused about National insurance

[CherryPiee]

Hello,

My partner is self employed. Recently completed his self assessment/rebate and has received 3,500 back.

He has put a grand of this aside as he isn't sure if they automatically take out your national insurance? He had a recent unexpected bill that this grand would be hugely helpful towards, however he isn't sure if he should be expecting a bill for national insurance at some point or if HMRC would have already taken National insurance out or not.

Can some explain in simple terms please??

I have no clue as have always been employed.

NIC will usually have been taken out of any tax refund, but that depends on if your OH completed his SA return properly and if HMRC properly accounted for NIC (they can make mistakes and accidentally override the NIC as they have a different NIC system and sometimes the NIC gets removed if their systems don't match). He needs to check what he submitted - he'll be able to see the tax and NIC calculation in his online tax account - it would have been shown when he entered the figures into the tax return online system and before he clicked the "submit" button.

Thank you - at present when he clicks on show national insurance contributions it just says 23/24 year has not been updated yet so we can't see if it will show paid in full or not?

You can't know about 23/24 until after the tax year ends next April

Is the refund for 22/23, has he done his tax return?

oh it must be yes, for the year just gone. So will it be the 22/23 year we should be looking at? It says paid in full?

yes he's done his tax return and got a 3500 payment back

Was that because he'd paid too much on account? When he checked the return before he submitted it the calculation of NI would have been shown. Is there a reason he can't check the return now?

i'm not sure, he gets a return every year.

He fills out how much tax he has paid, expenses he has paid (work vehicle etc.) and then he always gets something back in the region of 2-3000

He is worrying this year as he got a work mate to do it instead of an accountant so he is worried that national insurance hasn't been taken out of his tax refund and he is going to get a bill in January instead

he said he doesn't know what he is looking at when i said can he check it online

it's okay, he's an idiot (nicest way) clearly says under his national insurance contributions that 22/23 is full

An accountant is useful for making sure things are right.

Don’t get his mate to do it, get an accountant

if he is self employed now sure how he is getting a refund each year unless he has CIS tax deducted

This doesn’t actually mean what you think, it just means it counts to his state pension - not that he has paid what is due.

He needs to look at his actual tax return (not the national insurance section) and check that has the correct NIC calculated.

What is causing the refunds? Not normal in most trades

Is he on CIS and has he actually registered?

If he's been paid using CIS (construction industry scheme) but not registered they take 30% off, which is usually too much and could explain the refund.

If he has registered, the refund sounds high (DP used to get back a few hundred, but obviously circumstances vary).

Have you checked the calculation to make sure it is accurate? Does it match his accounts and an independent calculation eg

https://www.employedandselfemployed.co.uk/self-employed-tax-calculator

However, without seeing any numbers it's hard for anyone to say whether the refund is correct. Your DP is the one that HMRC will go after if his tax return is wrong so it's his responsibility check these things are correct and if he (or you) don't understand, then its probably worth using an accountant to do it for him.

i'm not sure, i guess he over pays tax every month (it is taken out of his wage) he is self employed but regularly works 'for' the same person - he is a stone mason.

Then when he does his self assessment he has to note all expenses he has paid out of his own pocket, his profits etc.

It's legit though as normally he pays an accountant to do it so i'm not concerned about that.

It's the national insurance that is iffy

He isn't getting a wage if he's self employed, you might think that's being pedantic but it sounds like maybe neither of you fully understand what's going on with his finances

In the nicest possible way you need to get that sorted, he needs to be on top of the basics