HMRC to solve Class 2 NICs issue in September 2025

You may remember that, in 2023, the then Conservative government announced a shake-up of Class 2 National Insurance Contributions (NICs). The changes came into force from 6th April 2024. However, if you want to complete your Self-Assessment Tax Return before September 2025, you may run into a Class 2 NICs issue when doing so. In this blog, we look at what has changed and where the problem lies.

What are the changes to Class 2 NICs?

We reported on the changes to Class 2 NICs a while back. However, it’s worth having a brief recap.

Before April 2024, most self-employed people paid £3.45 per week in National Insurance contributions. These counted towards their entitlement to the state pension and various benefits.

However, since then, self-employed people with profits over £12,570 have only had to pay Class 4 NICs. These still count as a ‘qualifying year’ for pension and benefit purposes. Those earning less than £12,570, but more than the Small Profits Threshold (SPT) of £6,725, are also ‘deemed’ to have paid their Class 2 NICs without having to pay them. Finally, people with lower incomes can opt in to (and pay) Class 2 NICs to maintain their entitlement to benefits.

What is the Class 2 NICs issue?

The Class 2 NICs issue arises when you try and complete your Self-Assessment Tax Return for 2024-25. This is the return that is due on or before 31st January 2026.

The problem apparently affects people with at least £12,570 in profits. Upon submitting their tax return, they are getting a correction message saying Class 2 NICs are payable. This error can result in up to £350.80 being added to the tax bill.

What can I do about the issue?

HMRC has said it will correct Self-Assessment tax bills by issuing a new SA302 tax calculation within 30 days. So, if you have completed your tax return and not yet paid the bill, you don’t need to worry. If you have paid the bill, HMRC will either give you a refund or credit the money to your Self-Assessment statement.

Unfortunately, if you submit your tax return before September, you will fall foul of the Class 2 NICs issue. However, HMRC has announced that it will resolve the IT problem in September. Once that has been done, then there shouldn’t be a Class 2 NICs issue if you subsequently submit your tax return.

The bottom line is that you shouldn’t need to take action if HMRC incorrectly adds Class 2 NICs to your tax bill. Your bill will be corrected. However, if you want a refund of incorrectly paid National Insurance, you may need to talk to HMRC.

Should I submit my tax return now?

If you want to submit your tax return between now and the IT fix in September, you can. However, you may find it simpler to wait until the system correctly calculates the National Insurance you do owe. If you’re a THP client and have any queries, please speak to your account manager.