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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 2 National Insurance contributions: Time limits for paying: Background

Regulation 4 of the Social Security (Crediting and Treatment of Contributions and National Insurance Numbers) Regulations 2001 (SI 2001 No 769)

Class 2 NICs are late for benefit purposes if they are paid outside certain time limits. When they are not paid on time, benefit may not be paid for up to six weeks from the date the Class 2 NICs are paid. This varies for each type of benefit.

There is also a Late Notification Penalty (LNP) for late registration, see NIM23008.

The due dates for paying Class 2 NICs are shown at NIM20550.

Class 2 NICs are treated as being paid on time for benefit purposes if they are paid before the first Sunday in January following the end of the contribution year in which they were due.

Example

Class 2 NICs due in respect of 2008/09 year

First Sunday in January following end of 2008/09 contribution year - 3 January 2010

If Class 2 NICs due for the 2008/09 contribution year are paid before 3 January 2010 they are treated as paid on the due date.

Class 2 NICs are marked late (L) for benefit purposes if they are paid

  • on or after the first Sunday in January following the end of the tax year in which they were due, and
  • not later than six tax years from the end of the contribution year in which they were due.

Class 2 NICs paid late may be payable at a higher rate, see NIM23002.

Example

Class 2 NICs due in respect of 2003/04 year

First Sunday in January following end of 2003/04 year - 2 January 2005

If Class 2 NICs due for the 2003/04 contribution year are paid on or after 2 January 2005 and before 6 April 2010, are marked as late (L).

If Class 2 NICs are marked as late they are treated as paid on the day after the end of 42 days that starts on the date on which the Class 2 NICs were paid.

Example

Class 2 NICs due in respect of 2008/09 year paid 29 March 2010

First Sunday in January following end of 2008/09 contribution year - 3 January 2010

42 day period starts 29 March 2010 and ends on 9 May 2010.

Class 2 NICs treated as paid on 10 May 2010.

Class 2 NICs due from 6 April 1983 are treated as not paid and marked extra late (LX) if they are paid more than six tax years after the end of the contribution year in which they were due. The contributions do not count towards long or short term benefits. However, the contributor still remains liable to pay extra late Class 2 NICs.

Example

Class 2 NICs due in respect of 2003/04 year

If Class 2 NICs due for the 2003/04 contribution year are paid on or after 6 April 2010, they are treated as not paid.

For Class 2 NICs due before 6 April 1983, the NICs were treated as not paid if paid more than two tax years after the end of the year in which they were due.

Example

Class 2 NICs due for the 1982/83 contribution year are treated as not paid and marked LX if paid on or after 6 April 1985.

Enquiries about effect of late payment of Class 2 NICs on benefits

Enquiries about how benefit is affected by late payment should be referred to DWP.