HMRC have published draft regulations, which will impose new penalties on people failing to notify the authorities when they become liable to pay Class 2 national insurance contributions.
The draft Social Security (Contributions) (Amendment No. xx) Regulations 2009 are subject to Parliamentary approval but are expected to come into force from 6 April 2009.
Broadly, the Regulations amend the Social Security (Contributions) Regulations 2001 and align the penalty provisions for failure to notify liability to Class 2 contributions with those applying to income tax (Reg. 87).
HMRC must be notified by 31 January following the end of the year in which the person concerned first becomes liable to pay Class 2 contributions. New Reg 87B imposes the penalties for failure to notify HMRC in time.
The penalties that may be imposed will be as follows:
- for a deliberate and concealed failure to comply with the requirement to notify, 100% of the lost contributions;
- for a deliberate but not concealed failure to comply with the requirement, 70% of the lost contributions; and
- for any other case, 30% of the lost contributions.
The draft regulations can be found on the HMRC website at http://www.hmrc.gov.uk/drafts/ss-c-a-092901-con-draft.pdf.