Claiming back tax or National Insurance

In this section:

Claiming back tax if you've had too much deducted from your pension
Reclaiming tax if you've overpaid through your job
Tax return corrections and refunds
Claiming back overpaid National Insurance contributions
Getting tax-free interest on savings or claiming tax back

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Claiming back overpaid National Insurance contributions

Claiming back overpaid National Insurance contributions

Whether you're employed or self-employed, there's a limit to the amount of National Insurance contributions (NICs) you need to pay each tax year. If you overpay or wrongly pay NICs you can claim the money back.

Paying NICs

You pay NICs if you are an employee or are self-employed, and you are aged 16 to State Pension age (currently 65 for men and 60 for women), providing your earnings are over a certain level. Entitlement to some benefits, such as the State Pension and Jobseeker's Allowance, depends on the type and amount of NICs you have paid or been credited with.

The following amounts apply for the 2008-09 tax year.

If you're employed

If you earn above £105 a week (the 'primary threshold') you pay 11 per cent on the excess over £105 as 'Class 1' NICs up to the upper limit of £770 earnings per week. You also pay one per cent of earnings above £770 a week as Class 1 NICs. Below £105 you pay no NICs.

If you're self-employed

You pay 'Class 2' NICs at a weekly rate of £2.30. However, if your earnings in the 2008-09 tax year are expected to be less than £4,825 then you may be entitled to the Small Earnings Exception (SEE) and not pay Class 2 NICs. You can apply for SEE for the 2008-09 tax year on form CF10. Class 2 NICs must be paid unless you apply for, and are issued with, a certificate of exception.

Download Small Earnings Exception helpnotes and claim form CF10

In addition to Class 2 NICs, you also pay 'Class 4' NICs on a percentage of your profits. You pay eight per cent on annual profits between £5,435 and £40,040 and one per cent on any profit over £40,040.

Class 4 NICs are an annual charge and are paid along with tax through the Self Assessment system in two payments on account and (if appropriate) a final balancing charge. Because they are an annual charge you are liable to pay Class 4 NICs on any profits for the year in which you reach State Pension age. For example, if you reach State Pension age on 1 May 2008 you will still have to pay Class 4 NICs on all of your annual profits above £5,435 for the 2008-09 year, but will be exempt from Class 4 NICs for tax years from 6 April 2009.

When might you overpay or wrongly pay?

You might have overpaid or wrongly paid NICs if:

you stopped being self-employed and continued to pay Class 2 NICs
you were still working after reaching State Pension age and your employer continued to deduct Class 1 NICs from your earnings
your earnings were below the primary threshold
you had more than one job and your combined earnings were more than the 'upper earnings limit'
you were employed and self-employed at the same time and paid Class 1 and Class 4 NICs or Class 1, 2 and/or 4 NICs but paid more than you needed to
you paid Class 2 NICs and your self-employed earnings were below the SEE limit for the year
you wrongly paid voluntary NICs (in this case see the later section 'If you think you've wrongly paid voluntary NICs')

Check current NIC rates and limits on HMRC website

What to do if you think you've overpaid NICs

HMRC's National Insurance Contributions Office usually gets in touch if you've paid £45.00 or more above the annual limit for Class 1 and/or Class 2 NICs. However, if you think you've overpaid but haven't been notified write to us after the end of the tax year (5 April).

What to write in your letter

why you think you've overpaid
which tax years and which class(es) of NICs you think you overpaid
your National Insurance number

Always ensure you sign the letter.

Evidence you need to include

a P60 or statement from your employer(s) showing NICs deducted from your wages during the tax year (Class 1)
your quarterly bill receipt (Class 2)
your Self Assessment Statement (Class 4)

You need to address your envelope for the attention of the department dealing with your NIC class - the table below gives further information.

Where to send your letter asking for a NICs refund

Class 1 and/or Class 2
NICs paid above the annual limit

Refunds Group

Wrongly paid Class 2 NICs

Self Employment Services

Overpaid Class 4 NICs

Deferment Services

Send your letter to:

HM Revenue & Customs, National Insurance Contributions Office, Benton Park View, Newcastle upon Tyne, NE98 1ZZ.

Refund limits and deadlines

There is no deadline for reclaiming excess contributions where, for example, you had two jobs or were both employed and self-employed.

If you have wrongly paid for any other reasons, there is normally a six-year time limit for claiming a refund.

If you are claiming a Class 2 NICs refund because your self-employed earnings for the tax year were below the SEE limit, you must apply for a refund in writing between 6 April and 31 January following the end of the relevant tax year, and supply evidence of your earnings for the whole tax year. Send your refund application to: HM Revenue & Customs, National Insurance Contributions Office, Self-Employment Services, Benton Park View, Newcastle upon Tyne, NE98 1ZZ.

More about National Insurance Contributions for self-employed people

Preventing NICs overpayments if you have more than one job

If you're an employee and you pay Class 1 contributions with two or more different employers or you are an employee paying Class 1 contributions and also self-employed and paying Class 2 and/or Class 4 contributions, you may be able to defer some of your contribution liability to prevent an overpayment.

If you need more help

For enquiries about a refund of Class 1 NICs, call the National Insurance Enquiries for Individuals helpline on 0845 302 1479. Lines are open Monday to Friday from 8.00 am to 5.00 pm.

Enquiries about SEE or Class 2 NICs refunds, call the Self Employed helpline on 0845 915 4655. Lines are open Monday to Friday from 8.00 am, to 5.00 pm.

If you're enquiring about a deferment or refund of Class 4 NICs, call Deferment Services on 0845 915 7141. Lines are open Monday to Thursday from 8.30 am to 5.00 pm and until 4.30 pm on Fridays.

If you think you've wrongly paid voluntary NICs

You may be able to claim a refund if you think you wrongly paid voluntary NICs where all of the following apply:

you're due to reach State Pension age on or after 6 April 2010
you paid voluntary National Insurance contributions between 25 May 2006 and 26 July 2007
at the time you paid them you were unaware of the Government's intention to reduce to 30 the number of qualifying years required for a full basic State Pension because you had not received information from HM Revenue & Customs about that intention

Note that strict criteria must be met in order to qualify for a refund in these circumstances.