I have recently taken on a client who started trading Sept 2010 with his wife as a cabinet maker. To 5.4.2011 they made £6k loss. The profit if any will be under £2000 for year ending 5.4.2012 His wife is self employed and pays Class 2 insurance but the husband did not. He has received a demand for Class 2 from Sept 2010 to April 2012 for £202.00. He contacted HMRC who said he would lose benefits if he did not pay the contributions but he could complete CF5 form for people with small earnings. He assures me he has sufficient contributions for state pension from previous PAYE employment. My concern is that if he does not pay Class 2 and becomes ill, will he be entitled to any sickness benefits. I have looked on HMRC site but have found it difficult to pin point the answer. He is in his early 60's so health is always a consideration
The DirectGov website has a page that shows the benefits that are linked to national insurance contributions and the benefits that are non-contributory.
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Pearce & Co - Chartered Accountant and Chartered Tax Adviser
