Class 4 after retirement

JodieR
JodieR 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

  • NeilEThere
    NeilEThere 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.
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