Why am I being charged Class 2 National Insurance in my 2024/25 Self-Assessment?

Some self-employed taxpayers are mistakenly charged Class 2 NICs due to an HMRC IT issue. If your profits exceed £12,570, you should only pay Class 4 National Insurance, not Class 2. Always check your self-assessment 2024/25 calculation to ensure it is correct.

Do I need to pay Class 2 NICs through Self-Assessment for 2024/25?

No. From 6 April 2024, Class 2 NICs are voluntary for self-employed individuals with profits below £6,725. Voluntary contributions can help build qualifying years for your State Pension, but if your profits are above this threshold, Class 2 should not appear on your self-assessment.

What should I do if my Self-Assessment shows the wrong Class 2 NIC charge?

If you’ve filed your 2024/25 self-assessment and notice an incorrect Class 2 NIC charge, contact HMRC to request a correction. If you haven’t filed yet, consider waiting until HMRC resolves the issue (expected by September 2025).

What happens if I already paid the incorrect Class 2 NICs through Self-Assessment?

HMRC will refund or credit any incorrect Class 2 NIC payments to your self-assessment account once the error is fixed. Keep proof of payment and HMRC correspondence for reference.

When is the deadline for submitting my 2024/25 Self-Assessment?

The online filing and payment deadline for 2024/25 self-assessment is 31 January 2026. The HMRC Class 2 NIC error does not affect this deadline. Submit on time to avoid late filing penalties.

Businesses warned Companies House Annual Return updated

Chadwell St Mary Accountants, Trueman Brown, are a firm of accountants who keep their client’s up-to-date with the latest developments.

When Tories came to power, they promised the British voter a “bonfire of the quangos” and a “cut in red tape”.

Well election pledges are meant to be broken and this has one has been broken spectacularly.

Chadwell St Mary local nearby accountants annual return

Well election pledges are meant to be broken and this has one has been broken spectacularly.

Since 2010, British businesses have been lumbered with increasing regulation including RTI and auto enrolment.

One of the least known pieces of regulation is about to take effect – The Registration of Persons with Significant Control (PSC) which has been introduced to increase the transparency of ownership in companies.

Since 6 April 2016, all companies and limited liability partnership (LLP) have been required to maintain a PSC for those people who have ‘significant control’ over that company or LLP.

SIGNIFICANT CONTROL – LIMITED COMPANIES

A person has significant if they: –

owns 25% of the company shares
owns 25% of the voting rights
the right to appoint or remove a majority of directors on the board
has significant influence or control over the company
has significant influence or control over a trust or company that meets one of the other conditions

SIGNIFICANT CONTROL – LIMITED LIABILITY PARTNERSHIPS

A person has significant control if they:-

own more than 25% of surplus assets on a winding up owns 25% of the voting rights.
the right to appoint or remove a majority of people involved in management.
has significant influence or control over the partnership.
has significant influence or control over a trust or company that meets one of the other conditions.

INFORMATION REQUIRED

The following information concerning the PSC should be maintained on the Register: –

name.
date of birth.
address (both residential and service).
country of residence.
nationality.
which of the 5 conditions for being a PSC is met.
date they became a PSC.
any restrictions on disclosing PSC information which are in place.

Furthermore, this information should be checked by company officials with the PSC, in writing. We attach letters which the company can use to write to the PSC of a limited company and an LLP to this information.

WHEN WILL COMPANIES AND LLPs HAVE TO COMPLY?

Companies and LLPs incorporated before 30^th June 2016 will have to file a PSC Register with their first Annual Confirmation Statement (the replacement to Annual Returns) to Companies House.

Those seeking to incorporate a new company or LLP will have to file a statement of significant initial control to Companies House.

Trueman Brown are accountants that specialize in dealing with small businesses. If we are local and nearby to you and if you need advice, then please contact us below.