Whether you are employed or self employed, there is a maximum amount of National Insurance Contributions (NICs) that you have to pay every year. And, if you pay more NICs than you have to, you can claim the overpayments back.
Here’s our four step guide to claiming back overpaid NICs.
1. Look at what NICs you should be paying
The NICs you pay depend on whether you are employed or self employed.
Employed – If you earn above a certain amount every week (the ‘primary threshold’) you pay Class 1 NICs on the amount you earn between the primary threshold and a published ‘upper limit’. Above the upper limit you still pay National Insurance Contributions, just at a lower amount.
Self-employed – You pay ‘Class 2’ National Insurance contributions at a weekly rate of £2.40, unless your profits are below a certain amount and you may be entitled to the Small Earnings Exception.
You also pay Class 4 NICs based on your business profits.
2. Work out when you might have overpaid
There are several circumstances in which you might find you have paid too many NICs. These include:
- Your earnings were below the primary threshold
- You continues working past State Retirement age and your employer continued to deduct Class 1 NICs
- You ceased being self-employed and continued paying Class 2 NICs
- Your self-employed earnings were below the Small Earnings Exception limit for the year
3. Write to HMRC
If you think that you have overpaid NICs, you should writer to HMRC after the end of the tax year. Your letter should include:
- Your National Insurance number
- Why you think you have overpaid
- Evidence of what NICs you have paid
The HMRC National Insurance Contributions Office will normally get in touch with you directly if they believe you have overpaid.
There is no deadline for reclaiming excess National Insurance Contributions where, for example, you had two jobs or were both employed and self-employed. If you have wrongly paid for any other reasons, there is normally a six-year time limit for claiming a refund.
However, if your business profits were below the Small Earnings Exceptions limit, you should claim a refund by 31st January of the year following the tax year in which you believe you overpaid.
4. Send your letter
Send your letter and evidence of your NIC overpayments to:
HM Revenue & Customs
National Insurance Contributions Office
Benton Park View
Newcastle upon Tyne