Home For accounting professionals General accounting discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Class 4 after retirement

JodieRJodieR Experienced MentorRegistered Posts: 1,002
I've got a client who reaches retirement age next month, but plans on continuing his business for the forseeable future. he's a sole trader and his accounts have always been drawn up to 31 January.

HMRC's website says the following:


If you stay in self-employment after you reach State Pension age you may still have to pay Class 4 National Insurance contributions. They're an annual charge and you may still have to pay them on any taxable profits for the year in which you reach State Pension age. You won't have to pay them from the beginning of the following tax year.

Am I correct in thinking that his last class 4 contributions will be paid on his 2012/13 tax return which will consist of profits earned to 31/01/2013 and therefore no class 4 will be due on profits in Feb or March 2013?

Comments

  • NeilEThereNeilEThere Just Joined Registered Posts: 4
    Correct. It is considered on a tax year basis - so for 12/13 (i.e. y/e 31.1.13) he is paying, nothing for the subsequent years / profits from 1.2.13 onwards.
Sign In or Register to comment.