Potential Client

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
I have possibly gained a new potential client who is coming upto retirement age of 65.

He is employed and self employed, he will start drawing his state pension aswell as a personal
pension.

After retiring he will carry on being employed and self employed.

What will be his situation with NI and income tax afer retirement?

Thanks!

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Potential Client

    I would presume that everything is the same apart from the extra personal allowance. This would be a good thing to check out because I am sure more and more clients will be coming forward in this position. Good point to raise rhm!
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Potential Client

    People over retirement age pay no NI contributions.

    Employers will still pay Class 1 secondary NI in respect of these employees though.

    Remember to cancel the Class 2 direct debit - HMRC will rarely remember to do it if you don't!
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Potential Client

    They also benefit from the increased personal allowance (personal age allowance (PAA)), as TC said.

    However, this allowance is reduced depending on their STI, the 06/07 limit was £20,100. The PAA is reduce by £1 based on this formula:

    1/2*(STI-20,100)

    You would deduct the result of the above from the PAA.

    Hope that makes sense.

    Regards

    Dean

    p.s the PAA increases again at 75.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Potential Client

    Very interesting reading. A subject I must look into more.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Potential Client

    Thanks for your replies. It now makes the situation clear.

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