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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

HM Revenue & Customs
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Notices of decision: Wording of decisions about failure to pay Class 3 National Insurance contributions within time limits due to ignorance or error: Non-application of higher rate provisions

DANSP24300 explains that decisions can be issued, which give those named in the decision the right of appeal, against notices issued by HMRC which tell a person whether

  • the reason for a contributor’s failure to pay Class 3 National Insurance contributions (NIC) within the period prescribed for its payment is his ignorance or error, and
  • if so, whether that ignorance or error was due to his failure to exercise due care and diligence.

If the ignorance or error was not due to the contributor’s failure to exercise due care and diligence, the contributor can pay the Class 3 NIC at the rate they were originally due rather than at a higher rate. See NIM25029 for information about higher rate provisions.

Persons named in a decision

The DAA1(A) should be issued to the person who wants to pay Class 3 NIC.

Period covered by a decision

When you issue such a decision refer to the tax year or tax years for which the person wants to pay Class 3 NIC.

Example of wording

The examples below apply the legal requirements and general principles for wording decisions in DANSP29200 and DANSP29300.


My decision is that:

In the 2005/06 tax year you were entitled to pay Class 3 contributions.

You failed to pay Class 3 contributions in the period within which it may be paid.

The failure to pay was attributable to your ignorance or error. That ignorance or error was the result of your failure to exercise due care and diligence.

Commentary on example

Before issuing such a decision, HMRC should have told the contributor

  • what higher rate provisions are and when they are usually applied,
  • what amounts are calculated as due applying the higher rate provisions,
  • what amounts would have been due if the NIC had been paid within the prescribed two year period,
  • why we consider that the condition in regulation 65(3) of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004) was not satisfied.