How an overpayment of NIC can arise

There is an annual maximum of contributions applying to any individual for a contribution year (tax year). This applies where the earner either:

1. •

   has two employments (and is therefore paying Class 1 national insurance contributions (NIC) twice)

2. •

   is both employed and self-employed and is therefore paying Class 1, 2 (prior to 6 April 2024) and 4 NIC

There is a proforma that must be followed to calculate whether a repayment is due. See below.

The mandatory requirement to pay Class 2 NIC was removed from 2024/25 onwards. Those below the small profits threshold could continue to pay Class 2 NIC voluntarily to protect their state benefit entitlements. See the Class 2 national insurance contributions guidance note.

Therefore the tests below have been split into the test which applies from 2024/25 onwards when Class 2 NIC is removed and that which applied for 2023/24.

The start of a new tax year might require some consideration as to NIC paid in the past