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Where Taxpayers and Advisers Meet

Refund of Class 2 NIC that was paid VOLUNTARILY is being refused

Posts: 3
Joined: Sat Oct 27, 2018 1:01 pm

Refund of Class 2 NIC that was paid VOLUNTARILY is being refused

Postby deesto » Sat Oct 27, 2018 1:06 pm

Hello everyone,

For my SA 2016/17, I was both Self Employed (1 businees) and Earning a Primary Threshold Salary through a limited company (2nd business). I am told I made enough contributions through my £8060 salary in order to make a stamp on my state Pension record (even though obviously these are at nil contributions as salary does not cross PT, but still). However, unfortunately, the box to pay voluntarily was still ticked ON by mistake on my 2016/17SA when it was filed. So I paid £145.60 of class 2 nic, which I think it was not necessary to do so due to the contributions made via the salary PAYE method. My self employed business did not cross the threshold required to pay NIC class 2 either, as this particular business made a loss, and the loss was also used/offset against all of my other profits, like the company's dividend payments.

I'm trying to get this refunded now, but HMRC say the deadline to be able to request a refund has passed on 31st Jan 2018. How can that be if I would have only paid the voluntary class 2 nic, plus the tax due on the dividends on the actual 31st Jan 2018, if not shortly after via DD? How can a deadline be between Apr 2017 and Jan 2018 for the SA that pertains on 2016/17.

Are they wrong, or am I wrong? If the amendment deadline date to the SA is 31st Jan 2019, should it not the same for NIC paid through SA?

I've sent HMRC 2 requests now via an online form, but I got two copy+paste and fairly standard reply letters saying the same thing over and over:

"Thank you for an application for a refund of Class 2 NIC.
There are strict time limits for refund due to low earnings from self-employment.
You must apply no later than the 31st Jan after the end of the tax year in question. For example, a refund of contributions paid in the 2016/17 year must be made after April 2017, but before 31st Jan 2018.
Unfortunately due to these time limits we are unable to offer you a refund of the contributions you have paid."

I cannot see anything that cross references to that statement on any documentation on HMRC, if nothing else I see there is 6 years to be able to make contributions to class 2 in case of gaps in the state pension record. So this is why it doesn't make sense. But if they are right and i'm wrong, id like to know why this is, and if it is indeed the case.

Any official accountancy literature, or HMRC manual information that you can refer me to in either case?

I can also make an amendment to my SA on taxcalc and FA software that will allow me to untick the option off, and will recalculate the tax without the need to pay £145.60, voluntarily. I have even filed an actual 2016/17SA amendment, but it is as though HMRC never received it or it is not recalculating the tax due correctly to apply this refund. An agent even tried to untick the box option for me, and though it was letting them amend my SA online this way over the phone, the tax calculation was still not amending and was showing them that is was still due -which even stumped the agents that I spoke to, and was told it would be escalated. But it seems the result of the escalation is still the same reply more or less.

"the payment that you have made in respect of class 2 ni cannot be refunded. go to"

I've been there, to this website, but there's nothing in regards to a time limit?

to add injury to insult, hmrc website says

"Fill in form CA8480 to apply for a Class 2 refund. You should do this within 6 years of the tax year you’re applying for."

I don't understand why voluntarily payments cannot be refunded if that is indeed the case. what's the logical thinking behind this, and not being able to change one's mind about that if it doesn't pertain to my particular situation? After all i would have technically have overpaid HMRC by voluntarily paying them in my case (due to the "extra" salary contribution).

They are pocketing £145.60 of my hard earned money now and holding that ransom when it did not correspond to my situation :(, and I'm paying the consequences of a bad accountant, who promised a great service and attention to detail at the start, but failed to deliver. If it was my mistake for not hiring an agent, at least it would also make it a little bit more bearable at least, even learn from the experience. But this is not my case.

Please feel free to ask anything if that helps to clarify or answer this question more efficiently. I appreciate all your responses. Many Thanks!

Posts: 216
Joined: Mon Jan 09, 2017 4:12 pm

Re: Refund of Class 2 NIC that was paid VOLUNTARILY is being refused

Postby AmanSood » Wed Jan 23, 2019 1:29 pm

Hi Unfortunately it looks like Class 2 voluntary contributions are non-refundable. link below to HMRC's website and you will see their comments under the "Detail" column.

But have you tried re-filing an amended tax return online? this may get around this issue..
Advising on UK employment, expatriate and personal taxes
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