Class 4 National Insurance contributions (NICs) Refunds and Repayment Supplement

If you made a claim for a refund of Class 4 NICs, or you act on behalf of someone who made a claim, between 19 April 1993 and 28 June 2005, you may be due a Repayment Supplement.

The National Insurance Contributions Office has recently reviewed their refund procedures for Class 4 NICs and has concluded that, between 19 April 1993 and 28 June 2005, some refunds were issued without the Repayment Supplement that was due on them.

From January 2003, a Repayment Supplement was given with the majority of Class 4 NICs refunds. From 28 June 2005, HM Revenue & Customs (HMRC) has given a Repayment Supplement with every Class 4 NICs refund.

What are Class 4 National Insurance contributions?

Class 4 NICs are normally paid by self-employed people in addition to Class 2 NICs. They are normally self-assessed and collected with the income tax charge on trade profits.

What is a Class 4 refund?

If you have not applied for deferment of Class 4 NICs and have paid, in the same tax year:

  • Class 1 and Class 4 NICs
  • Class 1, Class 2 and Class 4 NICs

you may be able to get a refund of overpaid Class 4 NICs.

If, after you have paid Class 4 NICs you think that you may have paid too much you can make a claim for a refund by writing to:

HM Revenue & Customs
National Insurance Contributions Office
Deferment Services, Room BP2301
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

You will need to give your full name, National Insurance number and a daytime telephone number.
For more information please see Class 4 National Insurance contributions.

What is a Repayment Supplement?

A Repayment Supplement is compensation that may be made to a customer where there is a delay in making a repayment and where appropriate, is added to a refund of Class 4 NICs.

Am I entitled to Repayment Supplement?

If you made a claim for a refund of Class 4 NICs between 19 April 1993 and 28 June 2005 and you received a payment which did not include a Repayment Supplement, you may be entitled to one.

Do I need to do anything if I am entitled to Repayment Supplement?

HMRC is already taking action to trace Class 4 NICs refunds claimed between19 April 1993 and 28 June 2005 that have been issued without a Repayment Supplement. You will receive a letter between February 2008 and May 2008, together with a Repayment Supplement cheque, if you are due a Repayment Supplement. Similarly, the next of kin/representative will be contacted in the case of deceased customers, who are due a Repayment Supplement.

Please contact us if you believe that you, or the person you are representing, are due a Repayment Supplement, and you don’t receive a letter from HMRC by 31 May 2008. Please provide us with as much information as possible about your original Class 4 refund so that we can assess your position. If possible, you should provide us with a copy of the letter you received when your original refund was issued.

You can contact HMRC National Insurance Contributions Office, Deferment Services by phoning 0845 91 57141. Alternatively, you can write to:

HM Revenue & Customs
National Insurance Contributions Office
Deferment Services, Room BP2301
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

You will need to give your full name, National Insurance number and a daytime telephone number.

Why this has happened

The Contributions Agency was part of the Department of Social Security (DSS) until 31 March 1999 and is now a part of HM Revenue & Customs. Initial interpretation of legislation was that Repayment Supplements were not due where the Class 4 refund claim was made to the Contributions Agency before 31 March 1999. That was based on the understanding that the legislation did not apply to refunds made by the DSS.

Also, the legislation that allows the Repayment Supplement to be paid with refunds of Class 4 NICs did not come into force until 19 April 1993. It was, therefore, understood that Repayment Supplements should not be paid with any refunds for tax years prior to 1993-94.

However, it has now been concluded that Repayment Supplements should have been paid with any Class 4 NICs refund where application was made on or after 19 April 1993, even where the application was in respect of earlier tax years.

It is important to note that from January 2003, a Repayment Supplement was given with the majority of Class 4 NICs refunds, and from 28 June 2005, the National Insurance Contributions Office has given a Repayment Supplement with every Class 4 NICs refund. This exercise only affects those customers who made an application between 19 April 1993 and 28 June 2005 and subsequently received a refund of Class 4 NICs without a Repayment Supplement.