I have recently taken over a practice from a retiring accountant.
One of the clients is a partnership between father and 2 sons, which has been trading for over 35 years. Looking back on the client's returns, the partnership has been making minimal profits due to AIA claims.
I have completed their tax returns for 2019-20 and calculated their tax and NIC incl Class 2 NIC payable and submitted to HMRC
HMRC have written back today with amended tax calculations without the Class 2 NIC saying the calculations have been amended in accordance with the information they hold.
I am worried that not having paid Class 2 NIC, they will not qualify for State Pension on retirement. I don't have all the records going back to check the history but the clients inform me that they remember paying NIC by stamps, and later receiving Class 2 NIC demands but for some time they don't remember receiving demands and assumed that all the taxes and NIC were being paid via their SA tax returns.
It's obvious that HMRC knew they have been self-employed but why the Class 2 NIC was never picked by the NI contributions office or HMRC is a mystery.
I know they can pay back the backdated NIC by making voluntary contributions, but this could be a costly exercise
Any ideas what the clients can do to resolve this matter?