National Insurance Contributions : What You Need to Know in 2025/26
National InsuranceMerranti

Class 2 NICs: Have You Been Overcharged in 2024/25?

If you’re self-employed and filing a Self Assessment return for the 2024/25 tax year, there’s a chance you may have been wrongly charged Class 2 National Insurance Contributions (NICs) — even if you weren’t required to pay them.

This is a developing issue flagged by multiple tax professionals and now under active investigation by HMRC.

Here’s what you need to know — and what to do if you’ve been affected.

🧾 The 2024/25 NIC Rule Change

From the 2024/25 tax year onwards:

  • Self-employed individuals with profits above £6,725 are entitled to a Class 2 NICs credit.

  • That means you get contribution benefits (like State Pension entitlements), but you don’t have to pay Class 2 NICs.

  • You can still opt to pay Class 2 NICs voluntarily (at £3.45/week) to maintain your contribution record if you’re under the threshold.

❗ What’s the Issue?

Despite the new rules, HMRC systems have incorrectly added Class 2 NICs charges to some tax returns for 2024/25.

Affected taxpayers have received incorrect SA302 tax calculations showing:

  1. A Class 2 NICs amount included when it should have been zero (i.e. the individual qualified for the credit).

  2. A Class 2 charge of £179.40 being added incorrectly to the tax due.

  3. A doubling of that amount (£358.80) in some cases, resulting in a significantly inflated overall tax bill.

These miscalculations appear to affect:

  • People with modest profits (above £6,725 but below the threshold where Class 2 is normally required).

  • Those who have submitted their return electronically but did not tick the box to voluntarily pay Class 2.

🛠️ What You Should Do

If you’ve already submitted your 2024/25 tax return, we recommend the following:

✅ Check your SA302 (Self Assessment Calculation) carefully — especially for a listed Class 2 NIC charge.

✅ Look at your profit figure:

  • If it’s above £6,725, and

  • You didn’t opt to pay Class 2 NICs voluntarily,
    …you likely should not be charged.

✅ Contact your accountant (or Merranti!) to amend your return if necessary.

✅ Check your National Insurance contribution record via your HMRC personal tax account, to ensure the correct information is logged.

📣 Merranti’s Advice

HMRC has confirmed it is investigating the issue, but has not yet released a blanket fix. That means you must take action manually if your return is affected.

At Merranti, we are helping clients:

  • Review 2024/25 Self Assessment tax calculations

  • Correct overcharged Class 2 NICs

  • Ensure NIC records remain accurate for State Pension eligibility

📨 Have concerns about Class 2 NICs on your return?

You might be overpaying tax unnecessarily or missing out on contribution credits.

👉 Find more updates in Merranti’s newsletter here
Or contact us today to review your 2024/25 NICs and tax status.

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