Recently, we’ve seen a surge in calls from concerned clients who have received amended tax calculations (SA302) from HMRC.
From April 2024, compulsory Class 2 National Insurance Contributions (NICs) of £179.40 were abolished for self-employed individuals with profits exceeding £6,725. Those with profits below this threshold can still make voluntary contributions.
By Rebecca Horne-Smith – Senior Tax Manager
However, HMRC’s IT systems have struggled to process this correctly for early filers who are neither required to pay Class 2 NICs nor intending to make voluntary payments.
For affected clients, the incorrectly issued SA302 tax calculations may:
- Include Class 2 NICs of £179.40 when they should not have been included, or
- Include Class 2 NICs of £179.40 and increase the tax due by a further £179.40 — effectively charging double for a contribution that isn’t due.
The CIOT highlighted this issue in June, and HMRC initially indicated it would be resolved by the end of July. However, HMRC’s Agent Update Issue 133 now states that the correction is unlikely to be implemented until September, with incorrect SA302s and letters continuing to be issued in the meantime.
How Many Are Affected?
While HMRC has not released precise figures, the CIOT has confirmed that a significant number of taxpayers have been impacted. The issue primarily affects those who filed early and whose profits are above the Class 2 NIC threshold. HMRC has begun correcting records where possible and affected individuals will be notified once updates are made.
If you are affected, please rest assured: HMRC will automatically update your account once the IT issue is resolved. There is no need to contact them, and they will notify you when your account has been corrected.
Why It Matters
While this may seem like a minor technical glitch, the ripple effects are significant. For agents, the time spent reassuring and responding to multiple clients quickly adds up. For unrepresented taxpayers — especially those not online — the confusion often leads to increased calls to HMRC, placing further strain on an already stretched customer service system, as highlighted in UHY’s recent article on industrial action.
Closing Thoughts
As we approach the first year of Making Tax Digital for Income Tax (MTD ITSA) in April 2026, it’s understandably disconcerting that many of those likely to fall within the MTD criteria — particularly self-employed individuals — are also among those affected by this Class 2 NIC issue. It highlights the growing pains of our increasing reliance on automated systems and the importance of ensuring they are robust and reliable.
We’ll continue to monitor developments and provide updates as they become available. Do get in touch if you would like to discuss any of the issues raised above.
