Returns: view and amend return: auto-correcting the SA return for Class 2 National Insurance
Examples where HMRC will correct an amount of NIC
There are three situations where HMRC will correct a customer’s self-assessment for the correct Class 2 NICs amount to be collected:-
Where the customer files a paper return and chooses to self calculate their self-assessment and this amount is not what HMRC expects to be collected
If a self-employed customer chooses to self calculate their tax and national insurance, they must enter the Class 2 NICs amount due on the SA110 Tax calculation in box 4.1. Where the figure they have included does not agree with the HMRC centrally held figure, this will prompt a recalculation.
Where the additional Class 2 NICs amount due is within the Class 2 NICs tolerances (see below) no further action will be taken. However, where it is outside the tolerances, the customers figure will be auto-corrected and the new Class 2 NIC amount included in the balancing payment. The customer will be notified of the correction on the SA302 Tax calculation form.
Where a customer has already filed their return and SA receives a new or updated Class 2 amount to be included in the balancing payment
When SA receives a new Class 2 NIC amount, a re-calculation will be prompted and where the amount due is within the Class 2 NICs tolerances, no further action will be taken.
Where the Class 2 amount is outside the Class 2 NICs tolerances,the customers return will be auto-corrected and the new Class 2 amount included in the balancing payment. The customer will be notified on the SA302 Tax calculation form.
Where a customer has elected to pay Class 2 NICs voluntarily on their tax return but has not paid the amount due by the 31 January payment date
A scan will take place after the 31 January payment date to remove any remaining unpaid Class 2 NICs amounts. The customer will be notified of the correction on the SA302 Tax calculation form.
Unpaid Voluntary Class 2 NICs contributions
Voluntary Class 2 NICs left unpaid after the 31 January due date cannot be treated as a debt as the customer has elected to pay this voluntarily.
Auto-correction outside the 9 month correction window
An HMRC auto-correction can only be made within 9 months following the date on which the completed return was filed with HMRC. Where SA receives updated Class 2 information after 9 months, an entry will be made on the Worklist W061 –Class 2 NICs and Marriage updates. For more information, see subject Work Management W061 (SAM71165).
Auto-correction where there is an open enquiry
When SA receives a new Class 2 amount and there is an open enquiry for that year, an entry will be made on W055- Failed online amendments and HMRC corrections. For more information see Work Management W055 (SAM71159).
Class 2 NICS tolerances
There is an £25 tolerance in the customer’s favour on amounts of Class 2 NICs declared on a self assessment return (box 4.1) and where HMRC needs to update a Class 2 amount that has already been included in a calculation of liability.
For more information regarding Class 2 National insurance, please see subject Class 2 National Insurance (SAM121665).