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Deadline for Revenue and Customs self assessment
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Sage self assessment summit: Part 1 - Class 2 NICs

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21st Dec 2016
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In this webinar, serialised in eight parts, tax experts Rebecca Benneyworth and Paula Tallon outline the main tax traps of the upcoming self assessment season, why they’re important and how to tackle them.

Part one examines potential issues accountants may find when tackling Class 2 NICs in the upcoming self assessment season. To watch the full Sage Self Assessment Summit webinar, including additional audience questions, click on this link and register absolutely free.

Topic 1 of 8: Class 2 NICs

A new topic for self assessment season 2017 is Class 2 NICs. Previously paid directly by taxpayers during the year, this crops up this year for the first time on the self assessment return and is provoking one or two practical issues.

There is a box on the return for Class 2 NICs, and if you want to check what your client’s liability is, log on to the HMRC website and go to the particular client you’ll find a new section containing ‘information that will help with your self assessment return’. If you look there it will actually show you the Class 2 liability.

There is, unfortunately, a complication. If you’ve got clients who have got a full-time job and have paid the maximum Class 1 national insurance contributions they will have usually had a deferral of Class 2 and not paid any.

However, technically the way you calculate the maximum contributions set down in the statutory instrument there is actually a technical liability of around £78. That’s not previously been followed up so clients haven’t paid it, but this year with Class 2 NICs coming within the self assessment structure that’s actually surfacing and causing a few problems.

If your tax software doesn’t calculate this, HMRC’s will, and the clients will have to pay. The adjustment has left quite a few people scratching their heads wondering where this has come from. It is due, and it’s a bit frustrating.

 

The next seven topics will be serialised on AccountingWEB in the run-up to the self assessment deadline, and include PPR, marriage allowance, Gift Aid and buy-to-let. You can view the full Sage Self Assessment Summit by registering here.

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