Further to HMRC’s update last month, it has now been confirmed by HMRC that it is taking longer than expected to fix the calculation problem affecting some self-assessment Class 2 National Insurance contributions.

HMRC earlier indicated that the issue would be fixed by the end of July, but the date has now been pushed back to September, three months later than originally announced.

The issue means that some self-employed taxpayers have been wrongly charged up to £358.80 as a result of the incorrect calculation.

In the latest Agent Update issue 133, HMRC provided an update and said ‘incorrect letters will continue to be issued until the IT problem is resolved in September’.

The full text of the update is as follows:

Self-Assessment Class 2 National Insurance contributions

We’re working to resolve an issue affecting some Self-Assessment taxpayers in relation to Class 2 National Insurance contributions (NICs) for the last tax year.

The nature of the error depends on individual circumstances, but some customers with self-employed profits above £12,570 have seen a Class 2 NICs charge of £358.80 added to their accounts when they shouldn’t have been. In some circumstances it will be less.

We’ve taken action to correct the Class 2 NICs figure where the information we hold has allowed us. If this applies to your clients, they will have received a message to let them know.

We will correct the records of other customers after the issue has been resolved and notify them when we have done so. Customers will be issued with a new SA302 tax calculation after their record has been corrected with a new 30-day limit.

Some customers have reported receiving a letter ‘correcting’ their NICs figure to the initial (correct) figure submitted in the tax return. In these circumstances the customer will not receive a further SA302 as the information held on record is correct.

Unfortunately, incorrect Class 2 NICs letters will continue to be issued until the IT problem is resolved in September. We will be correcting records before any incorrect amounts due affect the tax owed for 2024 to 2025. 

We are sorry for the inconvenience that this issue has caused. While we understand this may be concerning there should be no long-term impact. Customers who may have made a payment will either be refunded or have a credit added to their Self-Assessment statement.

As mentioned in our earlier update, practitioners can use this to inform clients that the error is not on their or the client’s part, but an HMRC system fault. Wording on the letter from HMRC correcting the NIC position gives the impression that there was an error on the tax return and may look something like this: