Rogue refunds of class 2 NI due to HMRC failure

Published: 9th May 2024

Self-employed taxpayers with profits below £6,725 can voluntarily pay Class 2 NI to maintain their entitlement to certain benefits, most importantly, it adds a year to their state pension entitlement record. HMRC appears to have failed to meet the payment deadline for voluntary Class 2 NI for the 2022/23 tax year. As a result, in some cases, its systems have automatically rejected the payment and returned up to £163.80 to the taxpayer. Unfortunately, HMRC is not yet proactively contacting taxpayers to resolve the issue, which means unless affected taxpayers take corrective action, they may lose their entitlement to NI-related benefits for 2022/23.

The Low Incomes Tax Reform Group is recommending that those who have received a refund to call HMRC’s National Insurance helpline on 0300 200 3500 to repay the NI. It’s not possible to simply pay the amount to the self-assessment account.