NIM22002 - Class 2 Liability: Small Earnings Exception (SEE) Refunds: Time limits

Regulation 47, SS(C)R 2001

If a self-employed contributor has paid Class 2 contributions for a year in which they satisfy the conditions for Small Earnings Exception (SEE) (see NIM21001), then a refund of those contributions may be made for that year or any part of that year, subject to the following:

• refunds can only be made for periods from and including 6th April 1988,
• applications must be made on or before 31st January following the end of the tax year for which the refund is claimed. This time limit cannot be extended, and
• applications must be made in writing and evidence of earnings must be provided (see NIM22003). If a contributor asks for a refund within a current year tell them to re-apply and submit evidence of earnings after the end of the tax year but on or before the following 31st January.

It may not always be in a person’s best interests to obtain a refund of Class 2 contributions on the grounds of low earnings and they should be advised about the benefit implications.

If an application is successful:

• the applicant is excepted from liability for the relevant period,
• a refund of contributions will be made, and
• a certificate of exception will be issued for the period covered by the refund.

If contributory benefits have been paid to the self-employed person or to anyone else based on the original Class 2 contributions, then the amount of the refund should be reduced by the amount of benefit paid.

NICO Self Employment Services deal with this type of Class 2 refund.

Advice on the application of the time limits can be obtained from Cross-Cutting Policy (Newcastle Technical Unit).