How to resolve issues with your class 2 national insurance contributions (NIC’s)

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When you are self- employed, you will be aware that you have to pay Class 2 National Insurance contributions. We have recently received amended self-assessment tax computations from HMRC for a few clients where they have incorrectly not included class 2 national insurance contributions in the calculations.

In recent years there have been quite a few changes in National Insurance contributions.  Around four years ago class 2 NIC was going to be abolished but instead the Government decided to collect contributions through self- assessment with effect from the 2015/16 tax year. Prior to this class 2 was paid by monthly direct debit or by paying a bill issued every 13 weeks.

Unfortunately, as tax and national insurance are dealt with by separate government departments, the change in system has led to some details not being passed across to HMRC correctly and consequently HMRC are not collecting contributions where they are due.

To rectify this and to check your National Insurance record we recommend that you contact the agency on 0300 200 3500.  They will be able to tell you if there are gaps in your record and what your options are. They will also notify HMRC which will ensure any future contributions are collected correctly. Unfortunately, we are not able to do this for you as they will only speak to the individual concerned.

Alternatively, you can set up a personal tax account online by going to www.gov.uk/personal-tax-account .  This will enable you to check your National Insurance record to see if there are any gaps and if there are you can again contact the agency on the number above.

You can read more about the current rates of class 2 NIC in our article here: www.lloydpiggott.co.uk/class-2-national-insurance/ and if you need to make a payment this will help www.lloydpiggott.co.uk/how-do-i-pay-my-tax-bill/