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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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Special Cases: Married Women: Cancelling election when full rate contracted-out NICs paid erroneously

Regulation 128, SS(C)R 2001

Full rate contracted-out NICs first paid after 5 April 1982

A woman with reduced liability who has paid full rate contracted-out NICs in any tax year after 5 April 1982 can cancel her election retrospectively, but only if more than one year is involved.

Full rate contracted-out NICs paid in only one tax year

If she has paid full rate contracted-out NICs in only one tax year after 5 April 1982, she can cancel her election from the start of the following tax year.  If full rate contracted-out NICs have been paid only in the current tax year, she can cancel it from either:

  • the beginning of the tax week following the one in which she tells the Department that she wants to cancel it; or
  • the beginning of any later week in the same tax year.

Full rate contracted-out NICs paid in more than one tax year

If she has paid full rate contracted-out NICs in more than one tax year after 5 April 1982, she can cancel her election from the beginning of the tax year following any one of those years.

Example

D rate contributions are paid in the 1998 to 1999 and 1999 to 2000 tax years. The election can be cancelled either from 6 April 1999 or 6 April 2000. Refunds of contributions must be considered for 1998 to 1999, but a refund for 1999 to 2000 depends on the woman’s choice.

Full rate contracted-out NICs first paid before 6 April 1982

If full rate contracted-out NICs have been paid in any tax year before 6 April 1982, cancellation can be accepted only from the beginning of the tax year following the one in which erroneous rate contributions were first paid, there is no choice.

Full rate not contracted-out NICs follow full rate contracted-out NICs

If full rate not contracted-out NICs have been paid after full rate contracted-out NICs, the rules applicable to full rate not contracted-out NICs may take precedence, see NIM30015.