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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Debt and return pursuit: NIC: deferred NICs: background and introduction


Legally a NICs liability can arise on earnings from each employment or self-employment of a contributor. If there were no limits, a contributor with more than one employment or who is both employed and self-employed could

  • pay more NICs than someone who earns the same amount from a single employment and
  • pay more NICs than are necessary to secure full benefit entitlement.

Deferment prevents a contributor paying NICs above the maximum required for the particular tax year and ensures that refunds of overpaid contributions do not have to be made.

Applying for deferment

There is no automatic right to deferment; the contributor must apply and confirm details of their total earnings. Form CA72A is used for deferment of Class 1 and CA72B for Class 2 and Class 4.

Deferment applies for one year only and further applications will not be considered if an earlier deferment debt remains. If no debt is outstanding, a contributor is automatically invited to apply for deferment in later years (as long as certain criteria are satisfied).

Deferment debts

Deferment is agreed in advance, on the basis that the customer will pay maximum Class 1 NICs for the year in their main employment. Payment of NICs on any other employment or self- employment is deferred on this basis.

Debts arise because the customer actually earns less in their main employment than estimated at the time of making the deferment application and does not pay maximum Class 1 NICs. This means that NICs are due on all or part of the earnings from their other employment or self employment up to the maximum required for the year.