I've just realised that I have reported the NI on a self-employed client (who also earns 75,000 p.a. under PAYE) incorrectly for 2003/4 & 2004/05. I showed him as exempt rather than as deferred, so consequently the payroll software has not calculated the 1% due. Additionally, the new rules introduced from 6 April 2003 passed me by, and application forms for deferment have not been submitted.
He is a high earner, and I calculate that without deferment allowed he would owe £3,016, with deferment £456. How do I best deal with this? I find that NICO documentation states that applications have to made within a very tight timeframe, and that late refunds 'may' be allowed on form CA5610 if all class 4 is paid up to date. In practice, is there likely to be any problem in getting refunds for 03/04 & 04/05 if the £3,016 were paid over first?
I'm fairly appalled that I missed this, and want to be fully informed before speaking to the client, or alerting NICO.
Is this something that I need to speak to my PII provider about?
Chris
Replies (1)
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The 1% is still payable
I would amend the 2005 Return to show deferment rather than exemption and notify the Revenue that NI was due for 2003/4. Submit applications for deferment of Class 4 for both years. I have found the contributions Agency to be fairly relaxed about late applications in the past; after all, there's no time limit on reclaiming the excess contributions, anyway.
You've just got to come clean to the client now, and don't forget that the increased class 4 has a knock-on effect into the payments on account.