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27 August 2015
Class 2 NI contributions – have you checked that your direct debit payments have stopped?
If you have had a direct debit payment taken by HMRC on or after 10 August 2015 for class 2 national insurance (NI) contributions, it is likely to have been taken in error. 

Changes to the collection of class 2 national insurance (NI) contributions came into force from April 2015. Rather than a monthly direct debit or bi-annual bill, collection is now under self assessment and class 2 NI will become due on 31 January of the year following assessment e.g. 31 January 2017 for the 2015/16 tax year.

The last payments under the old collection process were due on 10 July 2015 and HMRC advised that they would automatically cancel any direct debits after this date, confirming that ‘the customer will not need to do anything’. 

Unfortunately it appears that this was not the case for some of our clients, with direct debit payments also being taken in August 2015.  It appears that this error has occurred where HMRC have the individual recorded as paying voluntary class 2 NI payments in error.

If you have previously paid class 2 NI by direct debit, we would advise that you check that a payment has not been taken for August. If a payment has been taken, HMRC have advised that you should contact your bank directly to cancel the direct debit for future periods. You will also need to contact the NI office to ask them to change your NI records from direct debit to self assessment.  

You can then write to HMRC to apply for a refund of the class 2 NI taken by via direct debit.  The letter should include details of your national insurance number and the amounts and dates of class 2 NI that have been taken by direct debit in error highlighting that the payments relate to the 2015/16 tax period.

The letter should be sent to HMRC’s NI office at the below address.
HM Revenue and Customs 
Payment Reconciliation 
National Insurance Contributions Office 
Benton Park View 
Newcastle upon Tyne 
NE98 1ZZ 

If you would like any further information or advice on this matter please do get in touch with your usual tax contact.