Mrs Sane registered as self employed earlier this year for her Scentsy business.

Like most small businesses, she had start-up costs and is putting pretty much all of her profits back into the business so she won’t have any taxable income for at least a couple of years.  So it was a surprise to get a letter from HMRC today demanding £60 of National Insurance contributions.

I called them up for her and asked how she could be liable for National Insurance with no taxable income.  Or no salary at all, in fact.  The answer was that regardless of whether she has any taxable income, she is still liable for £2.50 per week National Insurance contributions to ensure she is eligible to receive benefits and to go towards a state pension.

She doesn’t claim benefits and there will be no such thing as a state pension by the time we’re old enough to retire so I asked if it was a voluntary contribution.  He told me that it wasn’t voluntary but she could opt out of paying it if she has a taxable income of less than £5k per year.  So … that would be voluntary then?