NIM75002 - Class 2 National Insurance contributions: Maternity Allowance: ability to pay Class 2 NICs before the due date
Regulation 90ZA of the Social Security (Contributions) (SSCR) Regulations 2001 (SI 2001 No. 1004)
Sections 11 and 35B of the Social Security Contributions and Benefits Act (SSCBA) 1992
Regulation 7 of the Social Security (Class 2 National Insurance Contributions Increase of Threshold) Regulations 2022 (SI 2022 No. 1329)
Since self-employed earners are prevented from making payment of Class 2 NICs until they file their Self Assessment (SA) tax return (a return cannot be filed before the end of the relevant tax year and can be filed up to the due date which is the following 31 January), special rules are needed to assist self-employed women to get Maternity Allowance where they would not be eligible for this through their previous year’s SA tax return.
There are 2 points in time at which such early payment may be required:
- before the relevant tax year has ended
- after the relevant tax year has ended but before the SA tax return is filed
Depending on when the payment is made the self-employed earner:
- may be either liable or entitled to pay or have Class 2 NICs treated as paid, (where the payment is made before the relevant tax year has ended); or
- will be liable or entitled to pay or have Class 2 NICs treated as paid (where the payment is made after the relevant tax year has ended and so the profits for that year have accrued but before the SA tax return is filed)
Where a person pays Class 2 NICs, it is to be treated:
- before the end of the tax year, as Class 2 NICs paid under section 11(6) of SSCBA 1992
- after the end of the tax year, as Class 2 NICs paid under section 11(2) of SSCBA 1992 if the person is liable to pay Class 2 NICs in respect of that week under that section, or otherwise as Class 2 NICs under section 11(6) of SSCBA 1992
Where a person has paid Class 2 NICs but they are entitled to have their Class 2 NICs treated as paid, any overpaid Class 2 NICs will be refunded. For more information on when Class 2 NICs can be treated as paid, see NIM70001.
From 6 April 2024 onwards
The Lower Profits Threshold was removed which means that liability to pay Class 2 NICs no longer exists.
Where a person pays Class 2 NICs before the end of the tax year, it is treated as Class 2 NICs paid under section 11(6) of SSCBA 1992
After the end of the tax year a person is treated as having actually paid Class 2 NICs under section 11(5B) of SSCBA 1992 if the person has profits at or above the Small Profits Threshold. Where a person has paid Class 2 NICs but they are entitled to have their Class 2 NICs treated as paid, any overpaid Class 2 NICs will be refunded. For more information on when Class 2 NICs can be treated as paid, see NIM70001.
Participating spouses
This provision allows self-employed spouses/civil partners of pregnant women to make early payments of Class 2 NICs (for the purposes of section 35B SSCBA 1992). The position set out above therefore also applies to them.
It is important to note that the payment of Class 2 NICs early in the circumstances outlined above can only apply for the purposes of assisting a claim to MA and can only be refunded if the spouse/civil partner is entitled to have their Class 2 NICs treated as paid. For more information on when Class 2 NICs can be treated as paid, see NIM70001.
Upon making a claim to MA, if the self-employed earner needs to pay Class 2 NICs to secure standard rate MA, once notified, HMRC will send a bill to the person for the required number of weeks. Whether the self-employed person opts to pay the Class 2 NICs is for them to decide. HMRC will not pursue payment.