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Farmers Averaging - What happens to Class 2 NIC?

Do class 2 contributions get credited when making an averaging claim?

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Farmer client has taxable profits for the first time in a couple of years and the result is that a 5 year averaging claim is beneficial.

The original position for 2015/16 meant that Cass 2 NICs weren't compulsory, and no voluntary contributions were made.

With the averging claim, the Clas 2 NIC is payable in 15/16, and so this will be factored into the adjsutment which goes in box 14 of TC2, so in essence, the Class 2 NIC figure is paid.

I'm not entirley sure what checks occur at HMRC's end when a farmers averaging claim is made - I'd presume they have some software, or someone, who checks them, and is able to identify when adjustments arise from NIC and update the NIC record accordingly (ok, mabye wishful thinking on my part).

My question, if anyone knows, is does the NIC record for the client get credited with this, or am I going to have to write to them and let them know and ask them to apply the credit?




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19th Jan 2018 16:49

On the flip side, if my client had paid Class 2 NIC in 2015/16, and the averaging claim then brought the profits below the threshold, then a repayment could be claimed in box 15 of TC2 for this.

Surely then HMRC would update their NIC record to show that it was no longer paid in 2015/16?

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