Class 2 NICs computation issues - Update from HMRC

We have received the following message from HMRC which we have been asked to share with our members. This relates to a computational issue affecting Class 2 National Insurance contributions (NICS) in the tax year 2024/25 – see our previous news article about this. HMRC’s update confirms that agents who receive incorrect computations on behalf of their clients do not need to contact HMRC or take any other action as HMRC are working to correct records and will notify those affected once they have done so. They are expecting to have done this by the end of July.

Update from HMRC

We’re working to resolve the issue which we became aware of on 9 May affecting some Self Assessment taxpayers in relation to Class 2 National Insurance contributions for the last tax year. 

The nature of the error depends on individual circumstances, but in general, customers with self-employed profits above £12,570 have seen Class 2 NICs charge of £358.80 added to their accounts when they shouldn’t have been, although in some circumstances it will be less. 

We’ve already taken action to correct the Class 2 NICs figure in circumstances where the information we hold has allowed us. If this applies to your clients, they will have received a message to let them know. We will correct the records of other customers after the issue has been resolved and again, notify them when we have done so, so there is no need for customers to contact us.  

We are expecting to have the issue resolved by the end of July at the latest and will be correcting records before any incorrect amounts due impact the tax owed for 2024–25. While we understand this may be concerning, we want to reassure you that there should be no long-term impact.

We’d also like to reassure you that customers who may have made a payment will either be refunded or have a credit added to their Self Assessment statement.