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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

Notices of decision: Wording of National Insurance contributions liability: Period covered by Class 4 National Insurance contributions liability decisions

DANSP16100 explains when Class 4 National Insurance contributions (NIC) liability decisions can be issued. The period covered by such decisions will always be the start and end of a tax year. Where the decision covers more than one tax year, show the first day of the first tax year and the last day of the last tax year covered. See the example below.

Example

Facts

A sub-postmistress who paid Class 1 NIC on her salary from the Post Office includes her salary in her self-assessment return along with her profits from the newsagent attached to the Post Office. She applied for deferment of the payment of Class 4 NIC which the Deferment team in HMRC’s National Insurance Contributions Office granted.

After the end of the tax year, Deferment wrote to the sub-postmistress telling her that she had not paid the maximum of Class 1 and 2 NIC and therefore, should pay £125.18 for Class 4 NIC. She disputed liability on the grounds that

  • she had already paid Class 1 NIC on her salary, and
  • that if the salary was excluded from the profits of the business she would not be liable to pay any Class 4 NIC.

Decision

My decision is that:

You are liable to pay Class 4 contributions in respect of your profits for the year from 6 April 2007 to 5 April 2008.

The amount you are liable to pay for the year from 6 April 2007 to 5 April 2008 is £125.18.