HMRC to collect class 2 NICs from PAYE codes – AccountingWEB

National Insurance, Payroll l

HMRC has said that it will collect outstanding class 2 national insurance contributions (NICs) from PAYE tax codes from April 2014.

This is aimed at those who were self employed but have now gone into PAYE or are paid a taxable UK based private pension, but still owe the Revenue class 2 NICs from when they were self employed.

HMRC said it had been sending payment requests since April 2013 to customers who owe class 2 NICs, and if they’re not paid, the debt can be picked up through their PAYE code from April 2014 or via a private debt collection agency.

If a client has received an incorrect payment request, the Revenue has asked that they contact them immediately.

In addition to this, those who owe class 2 NICs and haven’t paid or contacted HMRC will get an annual coding notice between January and March which will tell them the amount to be collected in April next year.

Relatedly, at the start of the year the government announced it would hold a consultation on using self assessment to collect class 2 NICs, but this relates to those still self employed.

The CIPP’s Diana Bruce said this may result in accountants getting more queries from those affected, especially if they haven’t paid attention to the letters from HMRC and then see a change in their pay.

“I would say that the queries will be to whoever is responsible for the payroll. But the individual will need to contact HMRC directly if they have an issue,” she said.

The CIPP recently issued a statement on HMRC’s ‘coding out’ consultation, which included a suggestion from members that HMRC look to improve the explanations in letters it issues to individuals.

“Whilst in broad agreement with the proposal to introduce graduated limits for the amount of debt which can be collected through PAYE, respondents had concern for those on low incomes,” the CIPP said.

“There was also disquiet over the likely increase in the number of enquiries employers will receive as a result of these proposals, and respondents suggested that HMRC look to improve the explanations in letters it issues to individuals.”

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