We are aware that some individuals have been receiving unexpected refunds of Class 2 voluntary National Insurance Contributions (NICs), paid in relation to the 2022/23 tax year. This appears to be where individuals with self-employed profits below £6,725 have paid voluntarily in order to receive credit towards the state pension (and certain other benefits) for the year.

Class 2 NICs are collected via Self-Assessment (SA) and the payments then need to be transferred to the individual’s National Insurance record. This is done automatically each year by HMRC. However, for voluntary Class 2 payments to be accepted via SA, they must be paid by 31 January. It appears that this year, the process which moves the payment from the SA computers to the NI records was run late.

The result is that some taxpayers who had paid their tax (including voluntary Class 2) by 31 January 2024 have been told that their Class 2 element was paid late and cannot be accepted. They have been issued with a revised income summary and tax calculation (SA302) rejecting the Class 2 payment and refunding the £163.80 paid.

If this has happened to you and you would still like to pay the contributions and obtain a ‘credit’ for 2022/23, further action is now needed. It is necessary to ring up the NI Contributions office (0300 200 3500) to obtain a payment reference and then make a special payment direct to them (it is not possible to simply pay the amount back onto the Self-Assessment account).

If you would like assistance in resolving the position, please get in touch with your usual DSG contact.