PENSION: Tax specialist urges taxi drivers to plug any National Insurance gaps before rule changes

A taxi driver tax specialist has urged cabbies to act now by plugging any gaps in their National Insurance (NI) payments before rules change in April 2023.

The Government is currently offering a limited-time opportunity for individuals to make up for missed NI contributions and secure their full state pension entitlements.

However according to taxi accountants Jason Short & Sons, that time is running out as changes arrive in April 2023.

Jason Short said: “Don't miss your chance to fill the gaps in your NI contributions and boost your future state pensions.

“For full state pension entitlement, you must have a sufficient NI history. To allow people to catch up on their NI contributions, the Government permits payments of class 3 NI (also known as voluntary contributions) at a fixed rate. Usually, this can be done for the last six years; however, there is a current incentive available that lets you pay your voluntary contributions back to 06 April 2006.”

From 6 April 2023 the Government will revert back to the original last six year period.

Short added: “If you have been out of the country, not earning or are approaching retirement, it is essential to check your NI contributions now to ensure you receive the maximum state pension possible. This can be done by signing into your Government Gateway, calling HMRC on 0300 200 3500, or even by writing to them.

“It's also worth mentioning that the new state pension is calculated differently; you now typically need ten qualifying NI contributions to be entitled to any state pension and have thirty-five contributions for the full amount. All the more reason for checking your current position on the matter.”

To be eligible for voluntary NI contributions, you must:

• Be under State Pension age

• Have a gap in your NICs record

• Be a resident in the UK for the tax year in question.