Can I claim a National Insurance Refund?
Did you know that it is possible to pay too much National Insurance? The good news is that you can reclaim any overpayment with a National Insurance Refund.
We set out some of the basic elements of National Insurance including; who does and does not have to pay, circumstances in which you might be due a NI refund and how to make a NI refund claim.
It can be tricky just figuring out which class of NICs you should be paying and claiming a NI refund is no simpler.
Our national insurance guide provides information on each class of national insurance and the contact details of the national insurance department if you need them.
Who pays National Insurance?
Everyone who works in the UK has to pay National Insurance from 16 years old until they are of state pension age. There are variations on the Class of NI you pay which depend on how you are employed; (i.e. Self employed or work for an employer).
You are legally obliged to have a NI number if you work in the UK and every individual’s number is unique to them. You need this number if you are ever in the position to claim UK state benefits or your state pension.
How could I have paid too much National Insurance?
Most taxpayers who work for one employer are unlikely to have paid an excess of National Insurance.
But many people whose employment circumstances are less straightforward are likely to have overpaid. This is because the system treats each job separately and deducts NICs from one, without reference to the others.
The crucial thing to remember is that HMRC have no process in place to check the accuracy of NIC payments and avoid taxpayers’ overpayments. It is all up to you to check you NI history and apply for a refund.
Circumstances that mean you may have overpaid NI:
- You have more than one job and you pay Class 1 NICs on them all.
- You are simultaneously employed and self-employed, paying Class 1, Class 2 and Class 4 NICs.
- You are highly paid ( over £42,385 p.a.) and have not applied for any NI deferment.
- You are over the state pension age and are still working (you should not be paying Class 1 NICs).
- You are self-employed and paid Class 2 NICs, even though your profits were under the Small Profits Threshold limit.
Basically, if your situation is anything other than one job paid through PAYE you are more likely to overpay national insurance and it’s worth checking to see if you are due a National Insurance refund.
National Insurance refunds for non UK nationals
There are some circumstances in which people who are not from the UK do not need to pay National Insurance and can claim an NI refund. These rules are governed by very specific legislation and it is absolutely crucial that you check which apply to your individual employment situation carefully.
For example, you do not need to pay NI if you have confirmation that you pay NI in another EEA country (European Economic Area). This requires ‘Portable Document A1, E101 or E102’ from your home country’s social security department.
Likewise, if you are from a country that has a bilateral agreement with the UK concerning social security, then you will need to produce the requisite certificate. Currently, countries with such an agreement are: Barbados, Bermuda, Bosnia and Herzegovina, Canada, Isle of Man, Israel, Jamaica, Japan, Jersey, Guernsey, Republic of Korea, Macedonia, Mauritius, Montenegro, Philippines, Serbia, Turkey, and USA.
If you are from a non-bilateral agreement or non-EEA country then you do not have to pay NI for the first 52 weeks of work in the UK. The same rule applies if your employer has sent you to the UK on a temporary assignment.
How do I make a NI refund claim?
All the information to claim back a national insurance refund is on Gov.UK. There are different procedures depending on the Class of NICs and the reason that you are applying for a refund.
You can check your national insurance payments through your online personal tax account.
Class 1 NICs refund
Initial advice is to inform and collect your class 1 NI refund through your employer. If this is not forthcoming, then you must write to HMRC.
The address for claiming a class 1 NIC refund is:
HM Revenue and Customs
National Insurance Contributions and Employer Office
BX9 1AN
The letter must include:
- Reason why your employer cannot refund you
- Your NI number
- The tax year(s) that you have overpaid
- Reason for overpayment
- Figures for: how much tax and NI you paid during the tax year(s) involved in your claim
There are different deadlines, depending on the reason why you overpaid:
- No deadline – more than one job.
- 6 years – paid the wrong rate, your employer made an error, you shouldn’t have been paying NICs at all. If you have one of HMRC’s ‘reasonable excuses’, then you may be able to go back further.
HMRC phone number for class 1 national insurance enquiries: 0300 200 3500.
Class 2 NICs refund
The rules here completely depend on why you are applying. If you have an accountant it is worth asking them about class 2 national insurance and how it affects you.
Paid too much class 2
If you paid too much class 2 NIC’s then you must write to HMRC with the relevant details: NI number, tax year(s) containing overpayment, accounts for those tax years (to confirm earnings), why you overpaid.
The address for claiming a class 2 NIC refund is:
HM Revenue and Customs
National Insurance Contributions and Employer Office
BX9 1AN
You have to phone HMRC on 0300 200 3500 to get the deadline for this application.
Shouldn’t have paid this Class of NICs
If you should not have paid Class 2 NICs then you need to complete Form CA8480, which has a deadline of 6 years.
Profits too low for class 2
If your profits were too low to pay Class 2 NICs, then you need to write to HMRC confirming that they were less than £5,965 for 2015-16 and with all of your relevant financial details.
In this case, the address for claiming a class 2 NIC refund is:
HM Revenue and Customs
National Insurance Contributions Office
Self Employment Services
Benton Park View
Newcastle upon Tyne
NE98 1ZZ
HMRC phone number for national insurance: 0300 200 3500
Deadline: Phone HMRC for this year’s deadline. The deadline for all other years has passed, so there can be no backdated claims for this Class of NICs.
Class 3 NICs refund
The address for claiming a class 3 NIC refund is:
HM Revenue and Customs
National Insurance Contributions and Employer Office
BX9 1AN
This letter should include which tax years you are applying for, the reason for your refund request and your National Insurance number.
You can call HMRC on 0300 200 3500.
Deadline:
6 years from the tax year in question.
Class 4 NICs refund
Again, this differs according to your reason for overpayment of class 4 NIC’s.
Shouldn’t have paid class 4
HMRC need you to contact the self assessment helpline to sort this out.
Deadline: You have 5 years from the tax year in which you overpaid.
Class 4 NIC refund
You need Form CA5610 to apply for Class 4 refund with this reason. You can start your application after the 1st February in the year after the tax year you are claiming for.
Deadline: There is no time limit to claim this kind of refund.
For any inquiries contact the Deferment Services Helpline on 03000 560631, Monday to Thursday, 8am to 5pm or Friday, 8am to 4:30pm.
