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HMRC Contacts Self-Employed After Class 2 National Insurance Refund Error

HMRC has begun reaching out to affected workers whose contributions were mistakenly refunded to help restore lost pension qualifying years.

Class 2 NICs – a flat-rate charge paid weekly – were scrapped by the Government last year (Photo: Peter Dazeley/Getty)
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Overview

  • HMRC has apologized for the mistake and is contacting thousands of self-employed individuals whose Class 2 contributions were wrongly refunded.
  • Incorrect refunds wipe out an entire year’s National Insurance credit, reducing state pension by about £342 a year per missing year and affecting entitlement to contributory benefits.
  • Class 2 NICs were abolished for those above the small profits threshold in April 2024 with automatic credits applied and remain voluntary for lower earners to protect state benefits.
  • Backdating a missing qualifying year through voluntary payments can cost over £900 annually compared with the original £3.45 weekly charge.
  • Experts urge self-employed workers to review their National Insurance records on Government Gateway and contact HMRC immediately to correct any discrepancies.