Earlier this year, HMRC extended the self-assessment deadline from January 31 to February 28 due to concerns that the Coronavirus would make it difficult for individuals and accountants to submit tax returns in time.

As a result, 1.8m people took advantage of the extension and did not file their return by the end of January 2021. It has since emerged that anyone who pays voluntary class 2 national Insurance Contributions could now miss out on key state benefits unless they contact HMRC now.

What are voluntary Class 2 National Insurance Contributions?

Self-employed individuals pay Class 2 National Insurance Contributions at a flat weekly rate and are commonly paid by small business owners and those with a second job.

People whose net profits are below a threshold of £6,345 are exempt from paying the contributions, but many choose to do so in order to protect their entitlement to benefits, including the state pension, bereavement benefits, maternity allowance, and contributory employment and support allowance.

How has the extension affected voluntary class 2 NIC?

The problem has occurred because HMRC systems do not allow for class 2 NIC to be counted if a tax return is filed after January. Due to the pandemic, HMRC states that, as they worked at speed to help those struggling during the pandemic, they were unable to implement an alternative measure to collect Class 2 NICs.

Those affected include individuals who have paid or are paying voluntary Class 2 NICs and have filed their latest tax return after January 31. They may also have mistakenly received a refund from HMRC of the voluntary Class 2 NICs they had paid. They might have logged on to their personal service account and found that no Class 2 NICs are shown for the 2019/20 year.

Others may have received a message from HMRC, reading: “I have corrected your self-assessment because you did not pay the Class 2 National Insurance shown on your tax return by January 31. It is now too late to pay voluntary Class 2 National Insurance through your tax return. You can find out how to pay this at GOV.UK’.

What should I do if I have been affected?

HMRC has apologised to everyone that may have been affected by this and encourages anyone who made voluntary class 2 NICs and filed their tax return after the deadline to contact them ASAP on 0300 200 3500

TFMC are on hand to help with any questions you may have. Contact our friendly team today on 0333 202 7198

Kass Verjee
Kass Verjee

Kass is not only a qualified bookkeeper/accountant but he is also a Fellow of The Institute of Chartered Accountants in England and Wales and has a full practising certificate.