Class 2 NIC count towards your state pension and other selected state benefits and are payable by all individuals who are either self-employed or are a partner in a trading partnership. The method of paying Class 2 NIC changed from 6th April 2016. From that date, Class 2 NIC are included on the tax return (as opposed to separate monthly DD/Post Office Payment) and paid together with income tax the following January. Class 2 NIC for a full year amounts to £145.60.
HMRC are currently operating 2 separate systems, one to record individuals for Income Tax and one for National Insurance. These 2 systems have not been linked by HMRC for all individuals with the result that on receipt of some individual’s tax returns the Class 2 contributions are being removed from the tax return and any payment made is being refunded or held on account by HMRC.
In order to ensure that your NIC record is up to date, we would advise you to check if
- 1. HMRC has issued you with a revised tax calculation for the tax year 2015/16 or
- 2. If you received an unexpected tax refund/revised Tax Calculation.
If you have received any of the above correspondence, please contact us immediately.