Self-employed urged to check their pension contributions
16th February 2017 | News
There are growing fears that the UK’s self-employed community are in danger of missing out on future pension payments as a result of poor communication between HM Revenue and Customs (HMRC) and the National Insurance office regarding Class 2 National Insurance contributions (NICs).
Since April 2016, self-employed professionals have been required to collect Class 2 NICs through their self-assessment tax return instead of direct debit, as had previously been the case.
A number of accountants across the country have reported cases where sole traders have not been given this information from either HMRC or the National Insurance office. This has resulted in many who have filed their self-assessment tax returns correctly having their Class 2 NICs removed from their 2015/16 tax calculations when contributions are still outstanding or have already been paid voluntarily.
Megan Smith, tax manager, Thorne Widgery, said: “It would seem that HMRC and the NI Office have failed to communicate properly to one another – even though they are supposed to be more joined up – about those who are due to pay Class 2 NICs since the changes made last year.
“We have already advised clients where HMRC have been taking the Class 2 NIC off their tax calculations even though it states on the tax returns that they are obviously self-employed.
“Worryingly, having spoken to, and heard from, other peers within our profession both locally and nationally we are not alone on this issue.”
The Institute of Chartered Accountants in England and Wales (ICAEW) tax faculty has also raised the issue on its blog, stating that, at present, HMRC is unable to offer a solution. Subsequently each case must be reviewed on its merits by the National Insurance office helpline, which the ICAEW believes is “very frustrating and a great waste of agent time”.
If you’re a self-employed professional and concerned about your Class 2 NICs and subsequent pension eligibility, your local TaxAssist Accountant can work with you to put you firmly in the picture.
To arrange a consultation with your nearest TaxAssist Accountant simply call our friendly team today on 0800 0523 555 or fill in our online enquiry form for more information.