SAM101080 - Records: maintain taxpayer record: deferred class 4 NIC
Where both Class 1 and Class 4 NIC is payable, the taxpayer may make a claim to the National Insurance Contributions Office (NICO) for deferment of Class 4 NIC, normally before the start of the return year. This means that the taxpayer does not have to pay Class 4 NIC to the Revenue. When profit details are available to them, NICO will calculate any Class 4 NIC liability and collect it themselves.
NICO may accept a deferment claim at any time up to 31 March following the end of the return year. In the event of a late claim, NICO have access to SA and will be able to establish whether the appropriate return has been filed. They will advise the taxpayer
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If the return has not yet been filed, to either
- File the return showing that Class 4 NIC has been deferred
Or
- Claim to adjust (reduce) payments on account accordingly
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If the return has been filed, to amend the return
Notification from National Insurance Contributions Office
Once NICO agree deferment, they will send a deferment certificate (form CA2703) to the taxpayer. NICO also send confirmation of deferment on form CA2732 to the processing office.
In May 2009, agreement was reached that issue of form CA2732 to processing offices and the completion of forms 750 by processing offices should stop. However, it has not been possible to stop the issue of forms CA2732 immediately. Until the issue of forms CA2732 to processing office ceases, destroy any forms received as confidential waste.
The taxpayer will continue to receive the Deferment Certificate, form CA2703 from NICO and should use this information to complete the appropriate Class 4 deferment boxes on their tax return.
When completing the SA tax return, the taxpayer will
- Enter a tick in the ‘Tick this box if exception or deferment applies’ box
- Enter ’0’ in the ‘Adjustments to profit chargeable to Class 4 National Insurance Contributions’ box
- Enter ’0’ in the ‘Class 4 National Insurance Contributions due’ box
Exceptionally, the taxpayer may not claim deferment on their return, although granted by NICO. There may be a genuine reason why deferment no longer applies.
If the taxpayer gives written notification, within 12 months of the filing date, that they want to change this aspect of the return, deal with it as a taxpayer amendment.
Note: Once the time limit has expired, the taxpayer may still make an ‘overpayment relief’ claim under Section 1AB1970 which replaced ‘error or mistake’ relief claims made under Section 33/33A TMA1970 in April 2010. Section 1AB TMA 1970 provides for a claim within 4 years of the filing date of the return for the year concerned. The relief is calculated and dealt with by repayment or set off. The return is not amended.
Detailed advice is available in subject ‘Claims: overpayment relief’ (SAM114040) in section ‘Claims Made Outside a Return’.
Class 4 NIC Deferment Registered File
The Class 4 NIC Deferment Registered File became obsolete in May 2009.
If not already done so, all unprocessed forms CA2732 in this file should be destroyed as confidential waste.
Any processed forms CA2732 in the file with forms 750 attached should be retained within the Establishment file.
The file should be dealt in accordance with HMRC retention policy (This content has been withheld because of exemptions in the Freedom of Information Act 2000) This states that an Establishment file no longer in use should be closed with a Destruction date clearly marked on the front of the file. Papers in the file should be kept for no more than 9 years.
The Destruction date for the Class 4 NIC Deferment Registered File will be 9 years from the date of the most recent paperwork within the file. The file should be weeded annually so that eventually the file and remaining papers disappear.