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HMRC internal manual

National Insurance Manual

Class 2 National Insurance contributions: payments: time limits for paying: contributory benefits

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.

Paid on time - Regulation 4(8)(a) of the Social Security (Crediting and Treatment of Contributions and National Insurance Numbers) Regulations 2001 (SI 2001 No 769)

Class 2 NICs are treated as being paid on time for benefit purposes if they are paid by 31 January following the end of the contribution year in which they were due.

Paid late - Regulation 4(3)(b) of the Social Security (Crediting and Treatment of Contributions and National Insurance Numbers) Regulations 2001 (SI 2001 No 769)

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

  • after 31 January following the end of the tax year in which they were due, and
  • not later than 6 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 NIM72150.

*Regulation 61B of the Social Security (Contributions) Regulations 2001

Due to the unavailability of pension statements for the new State Pension introduced by the Pensions Act 2014, HMRC has extended the normal time limits for the payment of Class 2 NICs for those people who reach State Pension age after 5 April 2016 (SI 2013 No 62). All tax years from 2006 to 2007 to 2015 to 2016 will be considered late under the above provisions until 5 April 2023.

Example

Class 2 NICs due in respect of the 2015 to 2016 contribution year

If Class 2 NICs due for the 2015 to 2016 contribution year are paid after 31 January 2017 and on or before 5 April 2023* are marked as late (L).

If Class 2 NICs are marked as late (that is, paid after 31 January after the end of the tax year in which they were due), they are treated for the purposes of working age contributory benefits (i.e. Employment and Support Allowance and Jobseekers Allowance) as having been paid at the expiry of a period of 42 days (including Sundays) commencing with the date on which the payment of the contributions is made.

Example

Class 2 NICs due in respect of 2015 to 2016 contribution year paid 29 March 2017

Due date of payment – 31 January 2017.

Class 2 NICs treated as paid on 10 May 2017.

In the above example, although there is a 42-day period preventing the delay of working age contributory benefits, the 42-day period does not apply to non-working age benefits (that is, State Pension). Using the example, the contributions would be regarded as paid on 29 March 2017 for State Pension purposes.

Paid extra late - Regulation 4(3)(a) of the Social Security (Crediting and Treatment of Contributions and National Insurance Numbers) Regulations 2001 (SI 2001 No 769)

From 6 April 1983, Class 2 NICs are treated as not paid and marked extra late (LX) if they are paid more than 6 tax years after the end of the contribution year in which they were due. The contributions do not count towards any benefits. However, where there is a liability the contributor still remains liable to pay extra late Class 2 NICs.

Example

Class 2 NICs due in respect of the 2015 to 2016 contribution year

If Class 2 NICs due for the 2015 to 2016 contribution year are paid on or after 6 April 2023 (the new State Pension has extended the normal 6-year time limit [5 April 2022] to 5 April 2023), they are treated as not paid.

Enquiries about the effect of late payment of Class 2 NICs on benefits should be referred to DWP.