The issue affecting many self-employed taxpayers in relation to Class 2 national insurance contributions (NICs) is unlikely to be resolved before the end of September
From the 2024-25 tax year, self-employed individuals with profits in excess of £6,725 no longer need to pay Class 2 NICs. Instead those taxpayers will receive a national insurance credit to secure their access to contributory benefits such as the state pension.
Earlier this year it was reported that several taxpayers had been sent letters by HMRC telling them that their tax return for 2024-25 had been amended to add a Class 2 NIC liability. This was an error by HMRC and the department has been working to put it right.
In the latest update, HMRC says that it has already corrected the Class 2 NIC position of taxpayers where the information it holds allows. It will correct the remaining records when the issue has been resolved, which is unlikely to be before the end of September, and those individuals will be notified. Some taxpayers will then be sent a new SA302 tax calculation which they will have 30 days to query.
If you receive a letter from HMRC ‘correcting’ your NICs to the original (correct) figure, no further action will be needed and you will not be sent a new SA302.
HMRC has also confirmed that until the issue has been fixed, erroneous Class 2 NIC letters will continue to be sent to taxpayers, but any incorrect adjustments will be reversed before they affect the 2024-25 tax liability. These letters can also be ignored.
Any individuals who have made a payment for the additional NICs incorrectly charged by HMRC will receive a refund or a credit added to their self assessment account.
If you have received a letter from HMRC in relation to your 2024-25 Class 2 NIC liability, we can help you decide what action – if any – you need to take.
Speak to our expert below for more information.
