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Voluntary National Insurance

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  • Voluntary National Insurance

    Important: Tax and National Insurance can be confusing and depends on your individual circumstances, the information contained within this article is intended as an informative guide and may not apply to your individual circumstances. If you have any doubts regarding the application of this information to your own circumstances we’ll advise you to seek the advice of HMRC or an authorised tax adviser. We are not tax advisers and nothing within this article constitutes advice.

    I've provided this advice as it's something that a lot of us seem to have issues with (mainly because like a lot of things in this industry nobody tells us anything about it)!

    As a seafarer (that includes anyone working at sea on cruise ships as well) how much and whether you are required to pay National Insurance varies dependant upon a number of factors;

    Originally posted by https://www.gov.uk/guidance/national-insurance-if-you-work-on-a-ship
    • Where you’re legally resident
    • Where your employer or the person who pays your wages is based
    • Where the vessel is registered
    • Where the owner or management company of the vessel is based
    • Where the vessel is trading
    • Whether you work inside or outside UK waters
    • What type of work you are doing onboard
    If you’re paid “NET” that is your employer automatically deducts tax and national insurance contributions from you when they pay you then you may (in some circumstances) be eligible to claim some of the money back. If like most seafarers you are paid “GROSS” that is your employer doesn’t make any deductions from you then you may be liable to pay National Insurance in some circumstances or you may be able to pay voluntary contributions to make the year count towards your pension.

    The first stage of this process is to complete the mariner’s National Insurance questionnaire provided by HM Revenue and Customs and send it off to the HMRC Mariners Unit, this will allow you to;

    Originally posted by https://www.gov.uk/guidance/national-insurance-if-you-work-on-a-ship
    • Check your National Insurance position
    • Check that you’re paying the correct amount
    • Pay any voluntary contributions
    • Check the status of your employer
    • Claim a refund
    You can obtain the latest version of the mariners questionnaire from https://www.gov.uk/government/public...-questionnaire

    If you haven’t paid National Insurance contributions and want to do so voluntarily tick yes for question 20 on the form.

    So I am not eligible to pay but I have been offered the option of paying Voluntary Contributions? Why would I do this?

    Your National Insurance contributions count towards certain benefits we receive from the UK government, including the State Pension. In order to be eligible to receive the State Pension, you must have paid a minimum number of years National Insurance. Only you can decide if this is worthwhile for yourself given your individual circumstances, depending on eligibility to make an individual tax year count towards your State Pension may cost you from between £120 - £200.

    The Process

    The first step is to print off the questionnaire, you’ll need one copy for each tax year you wish to enquire about / pay and you can’t submit the questionnaire for the current tax year until it has ended.

    Step 2 is to send the questionnaire(s) and any supporting documents (copies of your discharge book/certificates of discharge/contracts) to the address shown on the bottom of the form. This address changes every so often so make sure you’re using the latest form.

    Step 3 is to wait - a really long time - you’ll normally receive an acknowledgement of receipt of your questionnaire(s) after a month or two, it can then take up to 10 months to receive back a response from them stating any refund you are due, or if your doing this to pay voluntary contributions they’ll write back and tell you how much you need to pay to make the years count.

    Step 4 is to decide if it’s worthwhile to pay voluntary NI for those years if you decide it is then you send the payment slip and a cheque for the amount off to the address given on the letter.

    Step 5 is again to wait a long time - you’ll see the cheque is cashed fairly quickly, but don’t expect to receive anything back from HMRC for a few months, when they’ll write back and acknowledge receipt.

    Step 6 prepare to do it all again for the next tax year.

    Time periods have been fairly consistent for me over the past 5 - 6 years so don’t worry if you don't hear back from them for several months.

    If you’re registered for Self Assessment or the Government Gateway you can login to check your National Insurance record on the HMRC website, the website will also show you how many years you still have to complete to be eligible for your State Pension.
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