Repayments of NIC arising from two or more jobs

Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Repayments of NIC arising from two or more jobs
  • How an overpayment of NIC can arise
  • Collection and deferment
  • Class 1 deferment
  • Class 2
  • Class 4
  • Calculation of annual maximum
  • Test 1
  • Test 2
  • Claiming a refund of overpaid NIC

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 and 4 NIC)

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

The start of a new tax year might require some consideration as to NIC paid in the past and a look ahead to the future, depending on a taxpayer’s current circumstances. For example, an application might need to be made to defer Class 1 contributions or an existing deferral renewed.

Collection and deferment

Where an individual can demonstrate that they are paying more than the annual maximum of NIC (see below), it may be possible to apply for deferment.

It is only possible to make an application for deferment of Class 1 NIC. Prior to 2015/16, it was also possible to apply to defer Classes 2 and 4 NIC. This is because, with the collection of Class 2 NIC being within the self assessment tax return from 2015/16 onwards, Class 2 NIC is payable at a time when the Class 4 and Class 1 NIC liabilities for the year are 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 1 deferment

Applications via form CA72A are permitted for deferment of Class 1 primary contributions, for example, where the taxpayer has more than one employment. HMRC determines for which of the employments deferment will be granted. In those employment(s) where Class 1 deferment is granted, the employee continues to pay Class 1 contribu

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