Taxpayers currently have a window of opportunity to make voluntary national insurance contributions (NICs) to fill gaps in records dating back as far as the 2006/2007 tax year. Originally set for April 2023, the deadline was first extended to July 2023 and then further extended to 5 April 2025.
The deadline was extended to provide individuals with more time to decide whether to make voluntary contributions, which could help to increase state pension entitlements and/or access to other state benefits.
This opportunity may be of benefit to those who were employed or self-employed with earnings/profits below the relevant NIC thresholds, unemployed and not claiming benefits, or living/working abroad during the relevant tax years.
Payments made by the new deadline will be accepted at the rates applicable for the 2022/2023 tax year. Therefore, it may be advantageous to plug the gaps for more recent years, before the April 2025 deadline, at the lower NIC rates.
After the April 2025 deadline, the normal time limits will apply, allowing voluntary payments for only the previous six tax years. For example, you would have until 5 April 2026 to plug any gaps relating to the 2019/20 tax year.
Before making any payments, we would advise that you check whether making voluntary contributions for earlier years will actually boost your state pension and/or benefits entitlement.
If you have any queries or concerns about how these changes may impact your business, please do not hesitate to contact either Katie Williams in the employment taxes team, or your usual Hazlewoods contact.
