HMRC has recently acknowledged a processing error affecting voluntary Class 2 National Insurance Contributions (NICs) for the 2022/23 tax year. This error impacts some self-employed individuals with low profits who opted to pay these contributions. Unfortunately, HMRC have said that they are not able to identify who is affected and will not be alerting people to the problem.
Understanding the Issue
Due to an HMRC computer error, voluntary Class 2 NICs paid via self-assessment by the 31 January 2024 deadline may not be reflected in the National Insurance records.
The error stemmed from a delay in transferring Class 2 NIC data from the self-assessment system to the NIC system, causing on-time payments to be marked as late. This misalignment led to contributions being rejected, refunded, or held as overpayments.
Why It Matters
If you elected to pay voluntary Class 2 NICs in your 2022/23 tax return, it’s crucial to verify that your payment has been correctly applied to your National Insurance record. Failure to do so could result in losing a qualifying year for NIC purposes, which can affect your state pension and other contributory benefits.
Who Is Affected?
You might be affected if:
- You filed a self-assessment tax return for 2022/23 before 31 January 2024.
- Your self-employed profits were less than £6,725.
- You were not receiving National Insurance credits elsewhere.
- You opted to make voluntary Class 2 NICs to secure a qualifying year.
Identifying the Problem
To check if your contributions were rejected:
- Log into your Personal Tax Account or HMRC app to view your National Insurance record.
- Look for the year 2022/23 and see if it states “Year is not full.”
- Check for any customer service messages from HMRC about late payments.
Next Steps
If you find your contributions were not recorded:
- Contact HMRC’s National Insurance helpline and explain the issue.
- If necessary, make a separate payment using a special reference provided by HMRC.
Please note: If your contributions were actually paid late (so, if you paid your self assessment tax bill after the payment deadline of 31 January 2024), then the ‘rejection’ would be correct.
We hope HMRC will take steps to prevent this happening again in the future. In the meantime, if you would like to discuss this further, please don’t hesitate to contact us.
