When was the last time you checked your national insurance (NI) record for unexpected gaps or viewed your state pension forecast?
Keep Your NI Record Up To Date
Missing qualifying years in your NI record, or ‘gaps’, can reduce the amount of contributory benefits you are entitled to. This includes maternity pay, employment allowance, the state pension and others.
Why Do Gaps Occur?
Gaps can occur for many reasons, even when the individual believes they have done everything correctly. In 2023, it came to light that taxpayers who had signed up for child benefits prior to May 2000 and did not provide their NI number on the claim were left with years missing from their NI record due to home responsibilities protection not being applied correctly.
A further issue arose in February 2024 when a HMRC processing delay caused thousands of voluntary Class 2 NI contributions (NIC) to be rejected and refunded in error.
Why Would Class 2 NIC be rejected?
There are many other reasons why Class 2 NIC may be rejected, for example, if payment is made after the self-assessment deadline or if the individual was already enrolled in self-assessment for another reason before becoming self-employed and the change was not properly registered for NI purposes.
Employed taxpayers can also be left with unexpected NI gaps, for example, if the form that employers use to report their employees’ pay and tax details to HMRC is not posted correctly or contains errors.
How Do I Rectify Gaps?
Usually, voluntary payments can be made to boost your state pension entitlement and other contributory benefits by plugging NI gaps
for the previous six tax years. HMRC is currently accepting payments to fill gaps as far back as the 6th of April 2006.
The deadline for making extended back payments is the 5th of April 2025, less than six months away, after which the standard six-year limit will apply. It is vital that you check your NI record and state pension forecast while there is still time to replenish any missing years. You can do this online or via the HMRC app. Agents cannot access a client’s NI record, but if you identify any gaps, we can explain the options open to you and how to make voluntary payments.
Get Your Records Straight With Digital Tax Matters
It’s essential to fill in any gaps in your record to ensure you don’t miss out on any contributory benefits. If you need assistance getting your records in order, don’t hesitate to contact our team of expert accountants at Digital Tax Matters.