For Landlords - Is it Class 2 or Class 3 NIC?

missloulou

Hi
I am a landlord and am unsure whether I need to pay class 2 or 3 NIC, based on what HMRC advise.

Hoping for some opinions on the following situation, as I know its a tricky issue, and may be helpful for those who have landlords as clients.

I am 50. I left full time employment in 2006 and started investing in buy to let property. All NI contributions stopped. However I think I am eligible to pay class 2 contribtions for this period as I meet the criteria as advised in the National Insurance Manual NIM23800 published in April 2016 (extract below). I am effectively 'Bob'. I have several properties and have actively built these up over the years. I managed the properties myself, working full time as a landlord.

Extract from national insurance manual
Bob owns ten properties which are let out to students. He works full time as a landlord and is continually seeking to increase the number of properties he owns for letting. Bob is running a business for NICs purposes.

I have lived abroad since mid 2013. I contacted the contributions office who said if I want to top up my pension I can pay class 2 from the time I left the UK. However they added I could pay voluntary class 3 NIC from 2006 to mid 2013, my time from stopping full time employment up to leaving the UK.

So my questions are.
1)I think I qualify for class 2 prior to going abroad also. The form that I filled in asking pay contributions from abroad wasn’t adequate enough to explain my situation was 'Bob'. I have drafted a letter to HMRC explaining that I think I am 'Bob' and asking them to advise. Is it just a case of writing to HMRC to inform them of this, or do I need proof, and if so what would this need to be?

2) Should I be allowed to pay class 2, I believe I can only pay back as far as 6 years ago. Will I incur any penalties for late payment of these past 6 years?

3)Am I best sitting tight and waiting to see how the new class 4 affects things?

Thanks for any advice!