Self-assessment: Avoid Class 2 NIC Errors in 2024/25 Return

Self-Assessment 2024/25: Class 2 National Insurance Contributions Charged in Error

The Background: Class 2 NICs and Self-Assessment

From 6 April 2024, the liability for self-employed earners to pay Class 2 National Insurance contributions (NICs) was abolished. Instead, Class 2 NICs are now a voluntary payment option for those with profits below the small profits threshold (£6,725 for 2024/25) who want to secure a qualifying year for State Pension and benefit purposes. When completing a self-assessment return, individuals will need to decide whether to make these voluntary contributions to protect their future entitlement.

For 2024/25:

  • If profits are below £6,725 → You may opt to pay Class 2 voluntarily (£3.45 per week / £179.40 annually).

  • If profits are between £6,725 and £12,570 → You receive a National Insurance credit without paying.

  • If profits exceed £12,570 → You are only liable for Class 4 NICs, not Class 2.

The Problem: Incorrect Class 2 Charges in Self-Assessment

Some self-employed taxpayers are discovering that their self-assessment tax return for 2024/25 has been incorrectly calculated.

  • In many cases, a Class 2 NIC charge of £358.80 (double the correct voluntary annual rate) has been added in error.

  • This error particularly affects taxpayers with profits above £12,570, who should only pay Class 4 NICs.

  • In other cases, smaller but still incorrect Class 2 charges have appeared.

Chart showing NIC thresholds and voluntary Class 2 NIC options for 2024/25 self-assessment.

HMRC’s Response and Corrections

HMRC has acknowledged the issue and confirmed that:

  • They are taking corrective action automatically where their records allow.

  • Some taxpayers have already seen their Self Assessment (SA302) calculation corrected.

  • Incorrect Class 2 NIC letters will continue to be sent until HMRC resolves the IT problem in September 2025.

  • Once resolved, HMRC will correct remaining errors and notify affected taxpayers.

  • Any incorrect payments will either be refunded or added as a credit to the taxpayer’s account.

What Self-Employed Taxpayers Should Do

If you’re self-employed and completing your self-assessment return for 2024/25, here’s how to handle the situation:

Haven’t filed yet?

You may wish to wait until HMRC resolves the IT issue before submitting.

Already filed?

      • Check your self-assessment calculation carefully.

      • If the Class 2 charge is wrong, contact HMRC to ensure it is corrected.

Already paid the incorrect charge?

HMRC will either refund you or apply the payment as a credit.

Don’t miss the deadline

The filing and payment deadline for 2024/25 Self Assessment is 31 January 2026.

Final Thoughts on Self-Assessment Errors

This HMRC IT error means many self-employed taxpayers could see incorrect Class 2 NIC charges on their self-assessment tax returns. While HMRC is working on a fix, it’s important to check your calculation, avoid overpaying, and make sure you get a refund or credit if you’ve already been charged incorrectly.

 

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FAQs – Self-Assessment 2024/25 & Class 2 NICs

1. 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.

2. 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.

3. 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).

4. 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.

5. 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.

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