Deferment

By Tolley
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The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Deferment
  • Class 2 deferment
  • Class 4 deferment
  • Class 1 deferment
  • Assessment for underpayment

Where an individual can demonstrate that they are paying more than the ‘annual maxima’ of NIC (see the Annual maxima guidance note), it is possible to apply for deferment. An individual may pay more than the annual maxima where they have one or more employments (and are therefore paying Class 1 NICs twice) or where they are both employed and self-employed (and are therefore paying Class 1, Class 2 and / or Class 4 NICs). From 2015/16 onwards, it is only possible to make an application for deferment of Class 1 NICs. Prior to 2015/16, it was possible to apply to defer Classes 2 and 4 NICs also. This is because, with the collection of Class 2 NIC being within the Self Assessment Tax Return from 2015/16, Class 2 NIC is payable at the same time as Class 4 (and paid at a time when the Class 1 NIC liability for the year is already known). This means that the annual maximum calculation is done via the Self Assessment Tax Return.

The deferment application means that the NIC liabilities are not in fact paid in full in effect giving in-year relief for the annual maximum.

Class 2 deferment

From 2015

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