Self-employed taxpayers warned over missing Class 2 NI credits

HMRC is warning some self-employed taxpayers to check their National Insurance (NI) records after an issue affecting Class 2 NI credits came to light. The problem could leave some individuals with gaps in their contribution record, potentially affecting their entitlement to the State Pension and other contributory benefits. What should you do?

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From 6 April 2024, most self-employed individuals no longer pay Class 2 NI. Instead, those with profits above the small profits threshold receive Class 2 NI credits automatically, preserving their entitlement to contributory benefits without the need to pay contributions.

HMRC has identified an issue affecting some taxpayers whose records have not been updated correctly. As a result, they may not have received the Class 2 NI credits they were expecting, even though they satisfy the qualifying conditions.

The department is advising affected taxpayers to check their National Insurance record to ensure the relevant tax year has been credited correctly. Where a discrepancy is identified, it should be raised with HMRC so that the record can be amended.

Although the issue will not affect every self-employed individual, missing NI credits could reduce entitlement to the new State Pension if left uncorrected. Checking your NI record now may avoid more complicated issues when pension entitlement is calculated in the future.

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