National Insurance And Being an Exam marker

National Insurance

And Being an Exam marker (relevant to the UK - not sure about other countries)

If, like me, you work for one or more exam boards and you are approaching the age where you can claim your state pension then the information below could save you money! 

I found that I had  years to fill in my National Insurance record, which then determined the amount of state pension I would be paid. I had 6 years in total to fill since I retired from teaching in 2016. I had previously paid class 3 Voluntary contributions for 3 of those years. This left 3 still to be paid for.

Though a friend I discovered that Exam markers are a special case for National Insurance and are classed as self employed. This means any voluntary payments are class 2 rather than the usual class 3 which is at a much lower rate. Also, all employment is non permanent and just for the particular May/June or November exam session, so the contract is always for less than 12 months.

I contacted the National Insurance helpline who were very helpful and told me how much I needed to pay to fill the missing 3 years, it was a lot less than I had previously paid. As I’ve been marking for a number of years, I asked that I be recorded as self employed (by National Insurance) since retiring from teaching. This they have done. I’m now in the process of asking whether I can claim back some of the money I paid for the 3 years I paid previously.

I should say that it is worth seeking professional advice on whether it is beneficial to pay for these missing years (if you have any) in your National Insurance record, in terms of the extra State pension you would receive. The reason is, any money from teachers pensions etc is  classed as income and taken into account with your personal tax allowance and is reflected in your tax code. So, in practical terms you are going to be taxed more when you receive your state pension as well as your other pensions (in my case my teachers pension).

I should also say that this has no impact on your tax return if you have to fill one in as most of the time the exam boards will deduct any tax due before you get your pay. You are not classed as self employed for tax (self assessment) purposes when working as an exam marker.

I’m currently working as a consultant which means I’m a supplier to one of the exam boards. This does mean I’m self employed for this work. HMRC does allow you to claim   and allowance of £1000 towards this work. So, the first £1000 is tax free.

If anyone needs further advice on any of this, please contact me and I may be able to help.

Below is an extract from HMRC National Insurance handbook.

M74100 - Class 2 National Insurance contributions: special cases: examiners and moderators

Regulation 2(1) and 2(3) of, and Part II of Schedule 1 to, the Social Security (Categorisation of Earners) Regulations 1978 (SI 1978 No 1689)

For social security purposes, examiners and moderators are treated as self-employed earners.

Under section 2(2)(b) of the Social Security Contributions and Benefits Act 1992 (SSCBA), regulations may provide for a person in an employment of any prescribed description to be treated for the purposes of the SSCBA 1992 as falling within one or other of the categories of earner defined in subsection (1) – that is either an employed earner or a self-employed earner.

Schedule 1 to the Social Security (Categorisation of Earners) Regulations 1978 provides that any person holding an employment in which they are responsible for the conduct or administration of any examination leading to any certificate, diploma, degree or professional qualification and (under that employment) they are:

  • an examiner, moderator or invigilator (or employed in any similar capacity); or
  • engaged to set questions or tests for any such examination,

is to be treated as a self-employed earner for NICs purposes, provided that the work they do under the contract pertaining to that employment is to be performed in less than 12 months.

Those falling within this category of earners are not liable to pay Class 2 NICs but are entitled to pay under section 11(6) of SSCBA 1992. They are also required, under section 18 SSCBA 1992, to pay special Class 4 NICs if they earned above the Class 4 Lower Profits Limit.

From 6 April 2015, those examiners, moderators, invigilators etc engaged directly by the examining board under a ‘contract of service’ will be chargeable to tax as an employed earner under Pay As You Earn (PAYE). Their earnings will not constitute profits chargeable to income tax under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005. Such individuals will however remain as self-employed earners for NICs purposes and will be entitled to pay voluntary Class 2 NICs (and must also continue paying special Class 4 NICs, where applicable).

Voluntary Class 2 NICs can be paid either by an annual lump sum (NIM72050) or by Direct Debit (NIM72300).

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