Class 2 National Insurance contributions: Small Earnings Exception refunds: Time limits
Regulation 47 of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)
If a self-employed contributor has paid Class 2 contributions for a year in which they satisfy the conditions for Small Earnings Exception (SEE) (see NIM21001), then a refund of those contributions may be made for that year or any part of that year, subject to the following:
- refunds can only be made for periods from and including 6t h April 1988,
- applications must be made on or before 31s t January following the end of the tax year for which the refund is claimed. This time limit cannot be extended, and
- applications must be made in writing and evidence of earnings must be provided (see NIM22003). If a contributor asks for a refund within a current year tell them to re-apply and submit evidence of earnings after the end of the tax year but on or before the following 31s t January.
It may not always be in a person’s best interests to obtain a refund of Class 2 contributions on the grounds of low earnings and they should be advised about the benefit implications.
If an application is successful:
- the applicant is excepted from liability for the relevant period,
- a refund of contributions will be made, and
- a certificate of exception will be issued for the period covered by the refund.
If contributory benefits have been paid to the self-employed person or to anyone else based on the original Class 2 contributions, then the amount of the refund should be reduced by the amount of benefit paid.
Self Employment Services HMRC’s National Insurance Contributions and Employer Office deal with this type of Class 2 refund.
Advice on the application of the time limits can be obtained from
PAYE, SA & NICs (Employment Team),
Benton Park View
Newcastle upon Tyne