Low-income self-employed workers could be affected by HMRC NI error

An HMRC error involving the payment of voluntary Class 2 National Insurance contributions could affect low-income self-employed workers.

These voluntary payments can be made by self-employed workers who have profits under £6,725 and are usually paid via their self-assessment tax return by the deadline date of the 31^st of January. HMRC then transfers the NICs to the individual’s NI record to be counted towards their entitlement to certain benefits, such as the state pension and maternity.

However, the issue is that HMRC did not make the transfer until after the deadline date and this has resulted, in some cases, figures up to £163.80 being rejected and refunded automatically to those affected.

The Low Incomes Tax Reform Group (LITRG) is calling on HMRC to identify and contact those affected to make them aware of the issue and arrange for the voluntary Class 2 NICs to be paid and properly reflected on their National Insurance record.

LITRG Technical Officer, Antonia Stokes, said, “This appears to be an unfortunate error by HMRC that may impact certain low-income self-employed workers who have tried to keep their entitlement to National Insurance related benefits up to date in the 2022/23 tax year.

“The issue is unique to the year in question, and our advice to those who might be affected is to first check to see whether they have received a refund from HMRC. If they have, or if the taxpayer is unsure, they should contact the National Insurance contributions helpline to determine their position and, if necessary, make a special payment directly to them.

“We would also like to see HMRC acknowledge the error and proactively offer help to those taxpayers who have been affected, in line with HMRC’s own charter commitments. However, until they do so, there are practical steps that taxpayers can take to maintain their entitlement to National Insurance related benefits.”

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