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.

Tax Implications of Buying a Customer List UK

When a business considers the tax implications of buying a customer list UK, it needs to recognise that the acquisition is not simply purchasing names and contacts, but acquiring a set of relationships, preferences and history.

This means that for tax purposes, the cost of acquiring the list is treated as an intangible asset rather than a straightforward deductible expense.

1. What is a “customer list”?

A customer list is more than just a directory of names and contact details.

It represents the relationship with a customer, together with their buying behaviour, contact history and sometimes the contract rights or goodwill associated with them.

From a tax-perspective, under the rules on tax implications of buying a customer list UK, such lists are treated as intangible assets that derive their value from a business’s intellectual or legal rights.

For example, when you purchase a list from another business, you acquire the right to market to those contacts — the value is in the customer relationship, not just the spreadsheet.

2. Self-employed and partnership purchasers — tax implications of buying a customer list UK

If you are a sole trader or partnership, the tax implications of buying a customer list UK are quite restrictive. Because the asset is an intangible relationship rather than a process or physical item, the cost is not deductible as a revenue expense.

Infographic explaining the tax implications of buying a customer list UK for self-employed and corporate businesses, including tax relief, capital treatment, and HMRC guidance.

Instead, the cost becomes a capital item, which may be relevant when you eventually dispose of the business or sell that list. At that point the cost can reduce any capital gain.

For the seller in an unincorporated business context, the sale proceeds will typically be taxed as “other income”.

In short: for self-employed businesses, immediate relief is not normally available under the tax implications of buying a customer list UK.

3. Company purchasers — corporate tax and the regime for intangibles

When a company acquires a customer list, the tax implications of buying a customer list UK are governed by the intangible assets regime (Part 8 of the Corporation Tax Act 2009 and relevant HMRC manuals).
Some key points for 2025/26:

Customer lists acquired on or after 1 April 2019 are explicitly treated as “relevant assets” within the regime.
A company may elect to write down the cost of such an asset at a fixed rate of 6.5% per annum subject to certain restrictions (e.g., only where acquired as part of the acquisition of a business and where qualifying IP assets are also acquired).
If the list is acquired from a related party or a partnership involving a related party, relief may not be available.
As at 2025/26, the fundamentals remain: the cost must be capitalised, properly valued, and the appropriate relief claimed. While broader full-expensing reforms have tackled plant & machinery, intangible assets such as customer lists continue to follow the specialist intangibles regime.
Hence, companies planning to acquire a customer list should assess whether the acquisition qualifies under the regime and calculate the relief accordingly, bearing in mind the tax implications of buying a customer list UK.

4. Practical considerations before acquisition

When you’re reflecting on the tax implications of buying a customer list UK, you should pay attention to:

Was the asset acquired as part of the purchase of a business or part of a business? If yes, there is greater chance of relief.
Can the value of the customer list be reliably measured separately from goodwill? If so, it may be capitalised separately.
What is the relationship of the seller to the buyer? Acquisitions from connected parties may disqualify relief.
What is the useful economic life and expected returns from the list? That helps determine capitalisation and potential disposal implications.
Is the acquisition by a sole-trader, partnership or company? As covered already, treatment varies significantly.
Ensure your advisers assess the tax treatment under the 2025/26 rules and advise whether the customer list is best treated as goodwill or separately recognised intangible.
By addressing these points up-front, the intended benefit of the acquisition is clearer and the tax implications of buying a customer list UK can be more accurately managed.

5. Disposal implications and exit strategy

Turning to exit planning: the tax implications of buying a customer list UK also affect what happens when the list (or business to which it relates) is sold.

For unincorporated businesses: the cost of the list reduces capital gains when you dispose of the business, and disposal may qualify for Business Asset Disposal Relief (subject to conditions).
For a company: when a listed intangible is disposed of, the tax written-down value, or cost if no relief claimed, will be used to compute chargeable gains under the intangibles regime. Planning is needed to align value, cost base and relief history.
In both scenarios, early planning of the acquisition and disposal in tandem ensures you manage the tax implications of buying a customer list UK through the life-cycle of the asset.

6. How we at Trueman Brown can help you with the tax implications of buying a customer list UK

Acquiring a customer list brings significant opportunities but also clear tax risks.

At Trueman Brown we specialise in helping businesses navigate the tax implications of buying a customer list UK.

We can support you by:

Reviewing the acquisition structure to ensure the customer list is properly recognised and valued.
Advising on whether the purchase qualifies under the intangible assets regime and the correct approach to relief.
Assisting with the accounting and tax treatment, ensuring compliance with your corporation tax return or self-assessment.
Helping you plan for future disposal and exit strategy so the tax consequences are minimised.
For tailored support please contact us at mark@truemanbrown.co.uk or call 01708 397262. Let us help you manage the tax risks and benefits of purchasing a customer list.

FAQ — Your questions answered about the tax implications of buying a customer list UK

Q1. Can I deduct the cost of buying a customer list from my revenue for tax purposes?
If you are a sole trader or in a partnership, generally no. The cost of acquiring a customer list is treated as capital rather than revenue. That means you cannot deduct it from your trading income. Instead, it may reduce your capital gains when selling the business.

Q2. As a company, can I get full tax relief on the cost of acquiring a customer list?
For a company, relief is available under the intangible assets regime, but it is not full immediate relief. You may elect to write down the cost at the fixed rate of 6.5% per annum (for qualifying assets acquired post-1 April 2019). There are restrictions — for example, acquisition must occur as part of a business purchase and not from a related party.

Q3. What if I purchase the customer list from a connected party?
If you are a company acquiring from a related individual or partnership involving a related individual, relief may be unavailable. You may not be able to write down the cost under the intangibles regime. Careful structuring advice is essential.

Q4. Does the customised acquisition date matter for tax purposes?
Yes. Customer lists acquired on or after 1 April 2019 fall clearly within the regime for intangibles and relevant assets. Lists created or acquired earlier may have different treatment. The acquisition date is central to assessing the tax implications of buying a customer list UK.

Q5. How should I plan for disposal of the list?
You should consider at acquisition the future disposal strategy. For unincorporated businesses, ensure the cost is capitalised so it can reduce any future capital gains. For companies, maintain records of the cost, reliefs claimed, tax written-down values and ensure any disposal is treated under the intangibles regime. Proper planning ensures the tax implications of buying a customer list UK are managed across the asset lifecycle.

If you’d like to talk in more depth about how the tax implications of buying a customer list UK might apply in your specific situation — feel free to get in touch at mark@truemanbrown.co.uk or call 01708 397262.

Tax Implications of Buying a Customer List UK | Trueman Brown