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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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Class 3 NICs: Restrictions on the right to pay: precluded Class 3 NICs: tax year in which the person is age 17 or 18

Regulation 49(1)(f) Social Security (Contributions) Regulations 2001As 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 the tax year in which they are age 17 or 18 if, in an earlier tax year, they have satisfied the first contribution condition for:

  • basic State Pension (where the individual reaches State Pension age before 6 April 2010); or
  • widow’s pension; or
  • widowed mother’s allowance.

ExampleMr T was age 16 on 20th May 2002. After leaving school in July, he finds a job in a bank. But, not liking the work, he leaves on 5th April 2003. His earnings are £8,000.

He spends the whole of the next two tax years – 2003/04 and 2004/05 – touring around Great Britain. On his return home, he reads a newspaper article about paying Class 3 NICs for pension purposes to cover gaps in his NI record. So he enquires about paying Class 3 NICs for the 2003/04 and 2004/05 tax years.

The amount of Mr T’s earnings in the 2002/03 tax year is enough to make the year a qualifying one for the purposes of satisfying the first contribution condition for the above benefits (see NIM25011). As such, he is precluded from paying Class 3 NICs for the 2003/04 and 2004/05 tax years because he has satisfied the first contribution condition for the above benefits in a year – 2002/03 - before the ones in which he is age 17 and 18.

For details of the other circumstances in which a person is precluded from paying Class 3 NICs, see NIM25006 - NIM25012 andNIM25014 - NIM25017.