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Class 2 NIC on Cessation of self-employment

Are HMRC getting this wrong?

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We have recently filed two SA returns for clients who ceased trading during the tax-year.  We have calculated Class 2 for the weeks of self-employment up to cessation.  On filing the returns HMRC have issued revised tax calculations charging Class 2 for the whole tax-year.  Am I right in thinking HMRC are incorrect?

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By K81
12th Jun 2019 10:42

...and have you told NICO that the self-employment has ceased ?

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to K81
12th Jun 2019 10:52

No, simply stated the cessation date on the SA Return

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By K81
to bobhurn
12th Jun 2019 11:35

HMRC pick up what the NICO computer has told them is due & if NICO do not have that the self-employment has ceased HMRC will change your entry to a full years Class 2, a computer does this automatically, no human involved! If you telephone NICO & tell them the date of cessation they will update their records & the computer should automatically change the Class 2 back to your figure.
NICO do not pick up the date of cessation from the tax return - likewise they do not pick up new self-employment from the tax return, this needs to be advised separately also.

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to K81
12th Jun 2019 15:25

Ahh, yes. I think they called it "Joined Up Government".

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By Mitch
12th Jun 2019 10:55

You need to tell NICO by using the following form: https://www.tax.service.gov.uk/shortforms/form/CeaseTrading

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By Jholm
12th Jun 2019 11:04

Ahhhh.... the weekly class 2 NIC post :)

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12th Jun 2019 12:09

I think it will be an interesting point in 5-10 years when people don't have enough NI paid (ie where no registration arises at all) if informing HMRC of self employment via the tax return will be deemed as correct notice or not.

HMRC have all the available facts on the tax return, ie start/end dates, DOB and NIC number. No other facts are taken by the NI office, its just HMRC's rubbish systems not connecting the two.

Jo Public will just say "result no NIC" when HMRC amend the returns downward.

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By Jholm
to ireallyshouldknowthisbut
12th Jun 2019 12:12

Yep, and then when people start trying to make their advisors accountable.

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