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HMRC internal manual

National Insurance Manual

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Class 3 NICs: Restrictions on the right to pay: precluded Class 3 NICs: tax year is already a qualifying one for benefit purposes

Section 14 Social Security Contributions & Benefits Act 1992

Section 14 Social Security Contributions & Benefits (Northern Ireland) Act 1992As explained in

NIM25001, a person is not entitled to pay (ie, is precluded from paying) Class 3 NICs in certain circumstances. One of those is that they cannot pay for a tax year if their earnings factor (“EF”) or the aggregate of their EFs from:

  • in the case of the 1975/76-1986/87 tax years, Class 1, Class 2 or Class 3 NICs actually paid; or
  • in the case of the 1987/88 and subsequent tax years:

 

  • earnings on which primary Class 1 NICs have been paid or treated as paid;
  • Class 2 NICs paidis equal to or exceeds the qualifying EF (see

NIM25001) for that tax year.

ExampleMiss A’s EF for the 2003/04 tax year is £25,000. This is derived from earnings on which she has paid Class 1 NICs.

The qualifying EF for that year is £4,004. As her EF exceeds that figure, Miss A is precluded from paying Class 3 NICs for the 2003/04 tax year.

For details of the other circumstances in which a person is precluded from paying Class 3 NICs, see NIM25007 - NIM25017.