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Have you received an unexpected refund of your 2022/23 Class 2 NI voluntary contributions?

Due to a processing error at HMRC some taxpayers have received self-assessment tax calculations (SA302) incorrectly showing that their voluntary Class 2 National Insurance (NI) payment for 2022/23 was paid late and have been refunded.

Class 2 NI is paid by Self Employed taxpayers to secure a qualifying year for State Pension and access to other state benefits such as Maternity Allowance. Taxpayers who have had their Class 2 NI contributions refunded in error may now see a gap in their records for State Pension and other allowances.

Unfortunately HMRC have advised that they cannot automatically correct taxpayers’ records, even where the payment was made on time.

If you are affected by the error you can check your NI record online to see whether you are missing a qualifying year for State Pension for 2022/23. If you require a correction you can contact the NI Contributions office at HMRC. If you are unsure your Accountant should be able to advise you.   

Prior to 2024/25 Class 2 NI was paid at a fixed weekly amount (£3.15 for the 2023/23 tax year and £3.45 for the 2023/24 tax year) if profits were above the Small Profits Threshold.  If you did not automatically have to make contributions you can choose to make voluntary contributions.

For the 2024/25 tax year Class 2 NI contributions are treated as being paid if your Self Employed profits are £6,725 or more. This means that you do not need to include a payment of Class 2 NI contributions on your 2024/25 Self Assessment Tax Return, although you can still make voluntary contributions if your profits are below £6,725.

If your profits are over £12,570 for the 2024/25 tax year you must pay Class 4 NI contributions.  

Need help completing your Self Assessment Tax Return and calculating your tax? Give our friendly team a call on 01244 625 500 or drop us an email on contactus@foremansllp.com.