Class 2 National Insurance Error: What Self-Employed Taxpayers Need to Know

Date: July 29, 2025

HMRC has confirmed a recent issue affecting HMRC Class 2 National Insurance contributions for Self Assessment taxpayers. This follows an error affecting employee tax codes in June 2025 (more on this in our article here).

This is a developing situation that has implications for self-employed individuals with profits exceeding the Small Profits Threshold and could affect the amount you’ve been told you owe for the last tax year.

What Is Happening with Class 2 National Insurance in Self Assessment?

HM Revenue & Customs (HMRC) has identified a technical error in its Self Assessment tax system that has resulted in some self-employed taxpayers being charged Class 2 NICs incorrectly.

In many cases, the charge showing on taxpayer accounts is £358.80 for the year, even where it should not apply, although in some situations, a lower incorrect amount has been shown.

Who Is Affected by the HMRC Class 2 NICs Issue?

The problem mainly affects self-employed workers with annual profits above £12,570 who have submitted their Self Assessment return for the last tax year.

If you are affected:

You may have received an unexpected Class 2 NICs charge on your account.
You might also have received a letter from HMRC changing your NICs figure, sometimes back to the original correct amount.

What Is HMRC Doing to Fix the Problem?

HMRC has confirmed the following steps to correct the Class 2 National Insurance Error:

Automatic Corrections Where Possible: Where HMRC’s data allows, they have already adjusted the Class 2 NICs figure on affected taxpayers’ accounts. If this applies to you, you should have received a direct message or notice.
Revised SA302 Tax Calculations: If the error cannot be corrected immediately, HMRC will issue a new SA302 Self Assessment tax calculation once the fix is in place, with a fresh 30-day payment deadline.
Conflicting Letters: Some taxpayers have reported receiving a “corrected” NICs figure that simply matches the original return. In these cases, no further SA302 will be sent because HMRC’s record is already accurate.
Ongoing IT Issue Until September: HMRC expects the IT problem to be fully resolved by September, but incorrect NICs letters may continue to be sent until then.

Will The Class 2 National Insurance Error Affect My Tax Payments for 2024/25?

HMRC has assured taxpayers that:

Incorrect NICs charges will not affect the amount of tax owed for the 2024/25 tax year.
Any overpayments will be refunded or credited to your Self Assessment account.

Class 2 National Insurance Error – What Should Self-Employed Taxpayers Do Now?

If you are self-employed and submit a Self Assessment tax return, we recommend the following:

Check any recent HMRC correspondence carefully and compare figures with your original tax return.
Do not ignore HMRC letters, even if you suspect they are incorrect, speak to your accountant to confirm.
Keep a record of all HMRC communications and any payments made.

If you believe you have been wrongly charged, contact HMRC or your tax adviser as soon as possible.

Alexander & Co – Professional Advice from Chartered Accountants

While this situation is understandably frustrating, HMRC has stated that there should be no long-term financial impact. As always, our team at Alexander & Co is here to help clients navigate any Self Assessment or National Insurance issues.

We will continue to monitor updates from HMRC and work to ensure our clients’ records are accurate. If you have concerns about your Class 2 NICs and need assistance with your Self Assessment, contact us today for expert tax advice.