Collecting Class 2 NICs

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From April 2014, HMRC may collect outstanding Class 2 National Insurance Contributions (NICs) by adjusting the tax codes of customers in PAYE employment or receiving a UK based private pension, reports Harris and Co small business accountants.

HMRC is now sending payment requests to customers showing any Class 2 NICs they owe. Customers will be asked to pay or to contact HMRC if the payment request is wrong. This could be because the customer has stopped trading. The payment requests also say that not paying may mean HMRC will collect the debt through their PAYE code from April 2014 or pass it to a private debt collection agency for recovery.

Customers who do not pay or contact HMRC after getting a payment request may get a PAYE Coding Notice between January and March 2014. This will show the Class 2 NICs debt to be collected from April 2014.

If you"re an agent whose client is no longer self-employed they may not owe HMRC Class 2 NICs. Check your clients" payment requests and let HMRC know if they"re wrong. You can now tell HMRC if you have sold or closed your business using an online form. The form covers Self Assessment and National Insurance.

Further details are available from HMRC.

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