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HMRC internal manual

Enquiry Manual

Concluding the Enquiry: Class 4 NIC

Class 4 National Insurance Contributions are charged under Section 15(1) Social Security Contributions and Benefits Act 1992 on profits or gains chargeable to income tax under Part 2 Chapter 4 of ITTOIA 2005 in the same way as income tax is chargeable on profits or gains.

With a few special exceptions, Section 16(1) of that act applies to Class 4 NICs ‘as if they were income tax’ under all relevant provisions of the Taxes Acts.

This means that within SA, tax and Class 4 NICs are stated as one sum.

Class 4 NIC is not however deemed to be income tax and may need to be treated separately for debt recovery purposes once the liability has been brought into charge.

Section 37(2) of the Limitation Act 1980, which applies to the recovery of debts in England and Wales, exempts tax and other duties due to the Crown from the provisions of the act, but this does not extend to NI contributions.

This means that for NICs, HMRC has six years from the date on which NICs is due and payable (the cause of action date) to protect the Class 4 NIC in the courts for enforcement purposes.

In practice this has no direct bearing on the way you should conduct your enquiry. Where there is an open enquiry you must always include Class 4 NICs in the settlement together with any relevant interest.

The normal assessing time limits, see EM3270, are the only restriction on raising a charge for NIC, or for including it in a contract settlement.

For more details about how relevant dates applies to Class 4 NIC, see DMBM525940.