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Class 2 National Insurance -why do amounts submitted differ to HMRC calculations?

Article ID: 2617
Last updated: 12 Aug, 2020

Why have HMRC repaid or revised Class 2 NICs calculations which were submitted on my tax return?

It has come to light that there have been instances where the Class 2 NICs amount has been unexpectedly repaid or HMRC have issued a revised assessment showing no Class 2 NIC's due. This occurs when their records do not show any liability payable and although TaxCalc has included the Class 2 payments within the tax return, the HMRC system will override this with the amount held on their records.The reason for their system holding a nil amount may be due to them not having a record of self employment for you or your client and you may have to register.

How can I check the information that HMRC holds regarding Class 2 NICs?

To check the Class 2 NICs figure held on your HMRC online account, you should complete the instructions for Agents or Individuals (depending on your account type). The values displayed will be one of three possibilities:

  1. The amount of Class 2 NICs due. This will be greater than £0 (zero) and in most cases will not exceed £159.00 (2019/20). This will be based on the most up to date information HMRC holds.
  2. The amount displayed is £0. This would mean that the maximum NICs limit has been reached. When you go to Additional information, the screen will display 'Y' next to Maximum NICs Reached.
  3. No figure is displayed, only text stating 'Not available'. This could mean one of two things:
    • HMRC are not aware that there is a requirement for Class 2 (i.e. they have no knowledge that the individual was self-employed, in a partnerships/Lloyds, etc); OR
    • The amount will automatically be corrected when the return is submitted. When HMRC receive the SA302 tax calculation it will show that Class 2 has been included in the calculations.

Agents

  1. Log in to your HMRC online account.
  2. Click on Self-Assessment and the applicable client.
  3. Click on Tax Return Options from the left hand menu.
  4. Click on File Return.
  5. The new Class 2 screen will display the pre-populated Class 2 NIC figure.

Further information is also available from the Tax Return Options page, by accessing Information to help complete your tax return. There will then be an option for 'Additional information' which will display the following 3 NI items:

  • Total Class 2 NICs due.
  • Total Class 1 NICable earnings between the PT and UEL.
  • Maximum NICs Reached (this entry will display either 'Y' or 'N').

Individuals

  1. Log in to your HMRC online account.
  2. Click on Tax Return Options from the left hand menu.
  3. Click on File Return.
  4. The new Class 2 screen will display the pre-populated Class 2 NIC figure.

The View calculation summary page will also display Class 2 details.

What should I do if the amounts shown on the HMRC account do not agree to my return?

If there is a dispute between the information displayed on the HMRC website and the calculated amount, you should contact HMRC.

  • You will need to disclose the applicable start and end dates that are relevant for the calculation.
  • You should consider other scenarios which could impact the figure calculated. These could be due to claiming any benefits such as ESA, Incapacity or Maternity Allowance; or they were abroad, or they have reached State Pension Age, and HMRC were not aware. In most cases HMRC would have been aware of these circumstances and the amount of Class 2 due would have been calculated accordingly. 

Article ID: 2617
Last updated: 12 Aug, 2020
Revision: 10
Views: 1671
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Also listed in
folder Tax Return Production -> SA100 Individual Return