NIM23008 - Class 2 National Insurance contributions: time limits for paying: late notification penalties

Position before 6 April 2009 - Regulation 87 of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)

Anyone who started self-employment on or after 30 April 2001 but before 6 April 2009 had to register with HMRC within 3 months from the end of the calendar month in which they started self-employment. Failure to register within the time limits resulted in the individual being liable to a penalty of £100 unless:

• they satisfied the conditions for Small Earnings Exception throughout the period from the commencement of self-employment to the date they registered their self-employment, or
• they were able to provide a reasonable excuse for the delay in registering, or
• HMRC allowed extra time to register

When a penalty was imposed, Self-Employment Services in the National Insurance Contributions & Employer Office issued a penalty bill. If the individual disputed the imposition of the penalty, and the dispute could not be resolved, a formal decision was issued. The formal decision carried a right of appeal to the tribunal. The instructions for making a formal decision are in the Decision and Appeals for National Insurance and Statutory Payments (DANSP) guidance.

Position from 6 April 2009 to 5 April 2015 - Regulations 87A to 87G of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)

For individuals who became self-employed on or after 6 April 2009 but before 6 April 2015 there were provisions for charging penalties. The penalty was geared to the amount of Class 2 NICs due and there were provisions to reduce the amount of the penalty for disclosing a failure to comply with the requirement to notify. For more information about penalties, see the Compliance Handbook.