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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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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 (previously Case I & II Schedule D) in the same manner as any income tax … chargeable in respect of those profits or gains’. With a few special exceptions Section 16(1) of that act applies to Class 4 NIC `as if they were income tax’ all the machinery provisions of the Taxes Acts.

Although the tax provisions are applied contributions are not deemed to be income tax and there are two separate codes to be applied to the two charges. Everything done under the tax code must be done again under the Class 4 NIC code.

Pre-SA separate assessments were made on the same assessing set. Separate appeals were required and those appeals require separate determination. For SA years, tax and Class 4 NIC are stated as one sum.

Evaded Class 4 NIC together with related interest and penalties thereon, should be included in any settlement with the corresponding income tax liabilities. All the offences which can be committed in relation to income tax can also be committed in relation to Class 4 NIC.