NIM30015 - Special Cases: Married Women: Cancelling election when full rate not contracted-out NICs paid erroneously

Regulation 128, Social Security (Contributions) Regualtions 2001

Full rate not contracted-out NICs first paid after 5 April 1982

A woman with reduced liability who has paid full rate not contracted-out (A rate) contributions in any tax year after 5 April 1982 can cancel her election if there is a continuous period, beginning with the first, or only, A rate contribution in any tax year and ending with the woman’s notification that she wishes to cancel her election, during which:

• she has not been liable to pay contributions at the contracted-out rate or paid contributions at the reduced rate; and
• no A rate contributions have been refunded.

An election can be cancelled retrospectively if the woman notifies her intention to cancel the election before 31 December in the calendar year following the end of the tax year in which she last paid A rate contributions.

Example

If the notification is given at any time during the year 01 January 2000 to 31 December 2000, the woman must have paid A rate contributions in the 1998 to 1999 tax year or later, otherwise she is out of time.

If the time limit is not satisfied, the woman can cancel her election only from a forward date. If she has paid full rate contracted-out NICs as well as A rate, the guidance at NIM30014 should also be considered.

Date from which cancellation takes effect

Cancellation can take effect from the beginning of the continuous period referred to above. If the period covers more than one tax year, cancellation relates to the date of the first, or only, A rate contribution in the first of those years. There is no flexibility as in NIM30014.

Examples

A rate contributions only were paid in the 1997 to 1998, 1998 to 1999, and 1999 to 2000 tax years. There are no refunds and no other categories of contributions were paid before the contributor applied on 20 April 2001 to cancel her election from the 1997 to 1998 tax year. Cancellation took effect from the date on which she first paid A rate contributions in the 1997 to 1998 year.

A rate contributions were paid in the 1999 to 2000 tax year, and D rate were paid later in the year. Retrospective cancellation to the date of the first A rate contribution was not possible but could be allowed from 6 April 2000.

A rate contributions were paid in the 1996 to 1997 and 1999 to 2000 tax years, and B rate were paid in 1997 to 1998 and 1998 to 1999. Retrospection to the first A rate contribution in the 1996 to 1997 year was not possible, but was allowed from the date of the first A rate contribution in 1999 to 2000 following a timeous application and in the absence of any refund for that year and of any later payment of full rate contracted-out or reduced rate contributions.

A rate contributions only were paid in the 1998 to 1999, 1999 to 2000 and 2000 to 2001 tax years. In May 2000, the contributor obtained a refund of the 1998 to 1999 contributions, and in January 2001 applied to cancel her election retrospectively. It became effective from the date of the first A rate contribution in 1999 to 2000. The year in respect of which the contributions were refunded broke the continuity between the first payment in 1998 to 1999 and January 2001, but there was continuity from 1999 to 2000.

Full rate contracted-out NICs follow A rate

If full rate contracted-out NICs have been paid after A rate contributions, consideration should be given to the guidance at NIM30014 et seq.

A rate contributions first paid before 6 April 1982

If cancellation would otherwise take effect from the first A rate contribution in a tax year beginning before 6 April 1982, the cancellation can only be accepted from the beginning of the next tax year.