Incorrect Class 2 letters will continue until September
Further to previous articles about Class 2 Computation Issues for 2024/25, HMRC has shared a further update on the issue today, via Agent Update 133. The text of the update is below.
In brief, members have reported to us that following submission of tax returns for their self-employed clients, they have received letters saying that the Class 2 figure has been “corrected”. In some cases the actual amendment is nil, and no change has been made, in others an amount of £179.40 or £358.80 has been added to the taxpayer's liability.
Our understanding of the position is that taxpayers and agents who receive incorrect letters do not need to take any action - HMRC should resolve the position for affected taxpayers over the coming months. However, as the fix is taking longer than expected, incorrect letters will continue to go out until the end of September. We anticipate therefore that some individuals will not received corrected letters until after that date.
Where the original 'amendment' was for a value of £nil, as no actual correction was made, HMRC have confirmed to us that no further letter will be sent out.
Text from HMRC Agent Update 133
We’re working to resolve an issue affecting some Self Assessment taxpayers in relation to Class 2 National Insurance contributions (NICs) for the last tax year.
The nature of the error depends on individual circumstances, but some customers with self-employed profits above £12,570 have seen a Class 2 NICs charge of £358.80 added to their accounts when they shouldn’t have been. In some circumstances it will be less.
We’ve taken action to correct the Class 2 NICs figure 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 notify them when we have done so. Customers will be issued with a new SA302 tax calculation after their record has been corrected with a new 30-day limit.
Some customers have reported receiving a letter ‘correcting’ their NICs figure to the initial (correct) figure submitted in the tax return. In these circumstances the customer will not receive a further SA302 as the information held on record is correct.
Unfortunately, incorrect Class 2 NICs letters will continue to be issued until the IT problem is resolved in September. We will be correcting records before any incorrect amounts due affect the tax owed for 2024 to 2025.
We are sorry for the inconvenience that this issue has caused. While we understand this may be concerning there should be no long-term impact. Customers who may have made a payment will either be refunded or have a credit added to their Self Assessment statement.