Class 2 NI calculation error
From the 2024-25 tax year, self-employed individuals with profits in excess of £6,725 no longer need to pay Class 2 national insurance contributions (NIC).
Instead those taxpayers will receive a national insurance credit to secure their access to contributory benefits such as the state pension.
Several of the professional bodies have received reports from their members that Class 2 national insurance is being incorrectly included in SA302 tax calculations for 2024-25. Following submission of their tax return affected taxpayers have received letters from HMRC informing them that their return has been amended in one of three ways. HMRC has either:
- added £179.40 to the computation which should not have been added and needs to be removed;
- added £179.40 to the computation which needs to be removed and wrongly increased the tax liability by double this amount; or
- amended the Class 2 NIC amount to zero, which is in line with the original submission. In this instance no further action is required and the letter can be ignored.
This issue has been reported to HMRC and the department is investigating it as a matter of urgency.
If you have profits from self-employment above £6,725 and have submitted your self assessment tax return for 2024-25, we can help you check whether your tax liability and/or Class 2 NIC have been amended incorrectly by HMRC.
