What You Need to Know for 2025/26 — and How to Spot HMRC’s Ongoing Class 2 Error

Significant changes have taken place over the past two years in how self-employed individuals contribute towards National Insurance — and with it, their eligibility for the state pension and other contributory benefits.

In April 2024, the liability to pay Class 2 National Insurance contributions (NICs) was officially abolished, marking a major shift in the self-employed NICs system. However, confusion remains, and some self-assessment taxpayers are finding incorrect Class 2 NICs charges on their HMRC accounts.

If you’re self-employed and want to ensure your National Insurance record is accurate, it’s important to understand the difference between Class 2 and Class 4 contributions, the thresholds that apply in 2025/26, and how to check whether you’ve been incorrectly charged.

The Two NIC Classes for the Self-Employed

For the 2025/26 tax year, two types of NICs are relevant for those in self-employment:

Class 4 NICs – Now the Primary Contribution

Class 4 NICs are now the main mechanism for building up entitlement to the state pension and contributory benefits if you’re self-employed.

• Who pays Class 4?
  You’ll pay Class 4 if your self-employed profits exceed £12,570 — the lower profits limit, which aligns with the personal allowance for income tax.
• Rates for 2025/26:
• • 6% on profits between £12,570 and £50,270
  • 2% on profits above £50,270
• How are Class 4 NICs paid?
  These contributions are paid via the self-assessment system, alongside your income tax.
• What if profits are between £6,845 and £12,570?
  You don’t have to pay Class 4 NICs, but you’ll still receive a National Insurance credit, which counts as a qualifying year for state pension purposes — at no cost.
• What if profits are below £6,845?
  You won’t pay Class 4 NICs or receive a credit. However, you can opt to pay voluntary Class 2 contributions to secure a qualifying year.

Class 2 NICs – Now Voluntary Only

From 6 April 2024, Class 2 NICs became voluntary only. These are now intended purely as a way for those on low profits to protect their National Insurance record.

• Who can pay voluntary Class 2?
  If your profits are below £6,845 for 2025/26 and you want to secure a qualifying year, you can opt in to pay.
• Rate for 2025/26:
  • £3.50 per week
  • Equivalent to £182 per year
• Why would I pay Class 2 voluntarily?
  You need 35 qualifying years to receive the full state pension. If you don’t already have enough years through other NICs (like Class 1 from employment or credits from child benefit), Class 2 is a much cheaper option than paying Class 3, which costs £17.75 per week.
• How is it paid?
  Class 2 voluntary NICs are paid via your self-assessment return, just like income tax and Class 4 NICs.

Historical Position – Before 2024/25

For context, prior to April 2024:

• Class 2 NICs were compulsory for profits above the small profits threshold.
• Class 2 was the main contributor to qualifying years for the state pension.
• Class 4 NICs were not linked to contributory benefit entitlement.

That has now reversed — Class 4 is linked to benefits, and Class 2 is voluntary.

HMRC Error: Class 2 NICs Charged Incorrectly

Despite these changes, an ongoing IT issue at HMRC is causing Class 2 NICs charges to appear incorrectly on some self-employed taxpayers’ accounts.

The Issue

Since early 2025, multiple taxpayers have reported receiving SA302 tax calculations showing a liability for Class 2 NICs — even though:

• Their profits were above the small profits threshold, making them ineligible to pay Class 2; or
• They didn’t opt in to pay Class 2 voluntarily.

Amounts showing as due include:

• £179.40 (i.e., 52 weeks at £3.45 – the 2024/25 rate)
• £358.80 (double charge in some cases)
• Other erroneous figures

In each case, Class 2 NICs should not have been applied.

Who Is Affected?

• Self-employed individuals with profits above £12,570 in 2024/25
  (who should pay Class 4 only, not Class 2)
• Individuals who did not opt in to pay Class 2 but were charged anyway

HMRC’s Response and Corrections

Agent Update – July 2025

HMRC acknowledged the issue in Issue 133 of its Agent Update and stated that:

• They were working to resolve the problem urgently
• Corrections were being made where data allowed
• Corrected SA302s would be issued with a new 30-day payment deadline
• A permanent fix was expected by September 2025

What Should You Do?

1. Check your SA302 or online account
   Look for a Class 2 NICs line. If it appears and your profits are over £6,845 — and you didn’t opt in — this may be an error.

2. Check for any HMRC messages or corrections
   Some taxpayers have received messages or letters confirming a correction has been applied.

3. Don’t ignore the charge
   If you suspect the Class 2 NICs charge is incorrect:

• • Contact HMRC or your accountant
  • Wait for a corrected SA302 (if HMRC confirms one is being issued)
  • Avoid paying the incorrect amount unless advised to do so

1. Already paid the incorrect charge?
   HMRC has said it will issue refunds or credit your self-assessment account. No further action should be needed, but keep an eye on correspondence from HMRC.

Key Dates and Payment Reminders

For the 2025/26 tax year:

• Class 4 NICs (if due) are payable by 31 January 2027
• Voluntary Class 2 NICs (if opted in) are also payable via the same tax return

If your total tax and Class 4 NICs liability is £1,000 or more, and you don’t pay most of your tax at source, you may need to make payments on account in January and July 2026.

Final Thoughts

The self-employed NICs system has undergone a major overhaul — and for those unfamiliar with the changes, there’s a real risk of misunderstanding your obligations, missing a qualifying year, or paying more than necessary.

HMRC’s ongoing Class 2 NICs error only adds to the confusion. If you’re unsure whether your self-assessment calculation is correct, or if you need to plan to secure qualifying years affordably, it’s crucial to get professional advice.

At Merranti Accounting, we’re helping self-employed clients:

• Understand their NICs position
• Maximise their entitlement to the state pension
• Spot errors in their HMRC calculations
• Avoid overpayments and penalties

If you’ve received a confusing tax calculation, or want to plan ahead for retirement and contributions, get in touch with our tax team today.