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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 2 National Insurance contributions: Entitlement to pay voluntarily: Time limits

Regulation 1(2) and 4 of the Social Security (Crediting and Treatment of Contributions, etc.) Regulations 2001 (SI 2001 No 769)

There are time limits within which voluntary Class 2 National Insurance contributions (NICs) must be paid to count for contributory benefits, see NIM23001.

Although a person does not have to pay Class 2 NICs if they are not liable to do so, if they pay them more than 42 days after the end of the tax year in respect of which they are paid, they will for the purposes of entitlement to any contributory benefit, be treated as paid on the date payment is made. So, if a persons’ entitlement to a contributory benefit would be enhanced by NICs paid after the 42 days described previously, they will only enhance that benefit from the date the NICs were paid. The 42n d day after the end of a tax year is 17 May. A person who pays Class 2 NICs they are not liable to but are entitled to pay, in response to quarterly bills, payment requests or by DD, may pay some of the NICs after the 17 May. This potentially could have an adverse affect on entitlement to contributory benefits. See the example below which illustrates this point.

Example

Woman has Small Earnings Exception but asked for quarterly bills to be issued so she could consider paying Class 2 NICs voluntarily. She pays the Class 2 NICs due for the first three quarters of the year during the 2010/11 year. HMRC issue the last quarterly bill in April 2011.

Providing the woman pays the NICs for the last quarter of the 2010/11 year no later than 17 May 2011 the NICs will be treated as paid by the due date for contributory benefit purposes. If the woman makes a claim to such benefits anytime from the 6 April 2011 up to and including the date of payment, if

* paid no later than 17 May 2011, and
* the NICs paid for the 2010/11 are needed to qualify for benefits or will enhance the amount of the benefit payable, 

those NICs will count from the date of the claim if this is earlier than the date of payment.

If, however, she makes a claim to such benefits anytime from the 6 April 2011 to the date of payment, if

* paid after 17 May 2011, and
* the NICs paid for the 2010/11 are needed to qualify for benefits or will enhance the amount of the benefit payable, 

those NICs will only count from the date of payment.

Class 2 NICs for periods from 10 April 2011

PAYE, SA & NICs will produce guidance about the time limits for the payment of voluntary Class 2 NICs for periods from 10 April 2011 by April 2012.