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class 2 nic not included on tax assessments?

class 2 nic not on tax sassessments

hmrc are still issuing tax calculations and omitting the class 2 nic that is due.

why is this still the case?

do we need to do anything at our end to rectify?

thanks

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By Tornado
19th Feb 2019 13:22

Class 2 may be removed from a Self-Assessment if HMRC are not expecting to receive it. i.e., the taxpayer has not registered for Self-Employment.

I have also noticed some Self-Assessments being re-calculated and the class 2 entry removed if the taxpayer has not actually paid the 2018 class 2 by 31st January 2019.

This may happen when there were no payments on account required for the year (2108) and the payment of tax and Class 2 has been made after the 31st January (2019).

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19th Feb 2019 14:02

Messages from HMRC on the Agent Forum:

"The following announcement was carried in Agent Update 67 after discussions with the Issues Overview Group (IOG)
If the Class 2 NICs amount shows ‘Not Available, check help’ on the online SA tax return, this may be because:
• your client has not registered to pay Class 2 NICs. You can register your client online https://online.hmrc.gov.uk/registration/newbusiness/introduction
• you are trying to complete your client’s return between 2am - 5am (when this facility is unavailable).
If the Class 2 NICs amount shows as ‘£0.00’ this may be because of one of the following reasons:
• your client has not registered to pay Class 2 NICs. You can register your client online https://online.hmrc.gov.uk/registration/newbusiness/introduction
• your client may have paid the maximum Class 2 NICs due
• your client may have received certain benefits resulting in no Class 2 NICs liabilities
• your client may be paying Class 2 NICs in a different way e.g. if they were abroad.
If you think the Class 2 NICs amount is incorrect this maybe because:
• your client started working for themselves after 6 April or stopped before 5 April of the tax year. Your client will need to update their self-employment details.
Please note, where the Class 2 NICs amount has been updated allow 72hrs for this to be displayed. If your client has stopped trading as a sole trader you can notify us on the GOV.UK webpage Stop being self-employed https://www.gov.uk/stop-being-self-employed "

and

"Further information is also available at NIAnn4 – Class 2 NIC’s amount omitted/incorrect Self Assessment (SA) calculation ... and Agent Update 67 https://www.gov.uk/government/publications/agent-update-issue-67 on page 3
If there is one message that we would give to all Agents to pass onto their clients both now and in the future it is to ensure that – should they have to submit a Self-Assessment tax return - they follow the correct joint process to register with HMRC for Self-Assessment and Class 2 National Insurance. This should be done online and - as required by legislation - by 5 October in the business’s second tax year. It is essential that the correct joint registration process is followed so that HMRC can ensure the relevant IT systems are updated correctly. Failure to follow the correct process can result in the customer’s liability for Class 2 not being recorded correctly and in Class 2 contributions not being paid – and that can potentially lead to a reduced benefit entitlement, including State Pension.
If the correct procedure is followed the NI record is updated and the amount of Class 2 NIC due is prepopulated onto the SA Return. Completion of an SA Return does not update the NI system.
Cara I would advise you to check with the National Insurance Office that your clients have been correctly registered with them as Self Employed.
As stated above we rely on the figures from DWP to update our systems in relation to Benefit Entitlement/National Insurance Credits. The case in relation to the mother is likely to have been because the mother has claimed National Insurance Credits or a contributory benefit – please see link here https://www.gov.uk/national-insurance-credits/eligibility
Catherine Class 2 is not within SA. After a recommendation by the Office of Tax Simplification HMRC agreed to collect the Class 2 NIC, as long as we were notified by the customer, through their Self Assessment tax bill. The Class 2 is collected as part of the overall bill but not included in any calculations to Payments on Account for instance. "

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to Paul D Utherone
19th Feb 2019 14:44

This advice is bullshit. HMRC only have the ability to amend minor errors by virtue of TMA 1970 S9ZB, and S9ZB(4) renders HMRC's amendment ineffective if notice is given to HMRC rejecting the amendment (S9ZB(5))

Thanks (1)
to SteLacca
19th Feb 2019 22:44

Don't shoot the messenger :) Just passing on what HMRC are saying on the Agent Forum.

If you're lucky enough to have someone consistent that you can speak to (rather than pot luck with the ADL) a quick phone call suffices. Sadly that's not generally available

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avatar
19th Feb 2019 23:34

They seem perfectly capable of calculating Class 4!!!

Thanks (1)
20th Feb 2019 08:58

"It's not our fault" is the message.

I haven't had any of these for ages but when Class 2 started being collected through an annual payment, I had four, all of whom were trading and paying Class 2 under the old system quite happily.

I'm not seeing "We've c0cked up" as one of the possible reasons.

Nevertheless, the easiest answer to this is to get on to the Class 2 place in Newcastle. Waste of time complaining. They've got zillions of errors to deal with.

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22nd Feb 2019 12:18

In my experience this is caused by the client not being registered for Class 2. Maybe they ceased self-employment and then started up again but HMRC were not notified. I have found the best way to resolve this is simply to fill in the online CWF1 structured email form with the date they commenced self-employment. This then finds its way to the self-assessment system and HMRC hopefully then issue an amended SA302 to include the Class 2.

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to jon_griffey
22nd Feb 2019 12:29

jon_griffey wrote:

In my experience this is caused by the client not being registered for Class 2. Maybe they ceased self-employment and then started up again but HMRC were not notified. I have found the best way to resolve this is simply to fill in the online CWF1 structured email form with the date they commenced self-employment. This then finds its way to the self-assessment system and HMRC hopefully then issue an amended SA302 to include the Class 2.

I myself was one of those missing Class 2 contributors.

I had an unbroken period of self employment stretching back over 25 years (at the time). I never notified HMRC that I was no longer self employed yet I disappeared from the register.

I'll take some convincing that this wasn't HMRC's fault. I resent any implication that it wasn't HMRC's fault.

Sure - there'll be the odd case where the contributor didn't register but most of these cases seem to be people who'd cheerfully been paying by direct debit for years and then found HMRC expressing surprise that they were ever self employed.

Let's not kid ourselves or make excuses. This is about HMRC's inability to transfer records from one system to another.

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By ARAFVH
01st Mar 2019 10:09

Received 2 forms SA302 dated 8 Feb 2019 in each case removing Voluntary Class 2 NIC as it was "too late to pay by SA" and quoting a non-working link.
Returns filed
17/12/18 (for a long-term self-employed client) and
19/1/19 (for a newly-registered self-employed client - registered online 17/1/19.)
In BOTH cases when I rang HMRC agent line and was put through to NIC Helpline I was told the problem was that due to volume of work the returns were CAPTURED in February.
Client has to pay his Class 2 NIC a special way with a special reference.
(Have forwarded the examples to [email protected] as requested by https://www.tax.org.uk/policy-technical/technical-news/class-2-national-... back in March 2018)

Why should we all be put to extra work because HMRC processed a return in February which was filed online 2 or 6 weeks before the deadline?

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to ARAFVH
01st Mar 2019 10:37

ARAFVH wrote:

Why should we all be put to extra work because HMRC processed a return in February which was filed online 2 or 6 weeks before the deadline?

We've been doing extra work because HMRC are too lazy or too under-resourced for donkey's years.

Let's not mince words.

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