HMRC contacts self-employed people about National Insurance gaps

HMRC is writing to some self-employed individuals whose National Insurance (NI) records may contain gaps that could affect their future State Pension entitlement.

The issue potentially affects people who were self-employed between 2015 and early 2024, with HMRC estimating that up to 800,000 taxpayers could be affected.

If you receive a letter, it is important not to ignore it. In some circumstances, you may be able to increase your State Pension entitlement by making voluntary NI contributions to fill missing years, potentially going back as far as 2015/16.

What should you check?

If HMRC contacts you, you should review:

• Your State Pension forecast.

• Your National Insurance record.

• Any missing or incomplete qualifying years.

• Whether filling those gaps would actually increase your State Pension.
  

Your State Pension forecast and NI record can be checked through your Personal Tax Account on GOV.UK.

Don't assume you need to pay

Receiving a letter does not automatically mean you should make additional contributions.

Some people may already have enough qualifying years to receive the full State Pension. In these circumstances, paying voluntary NI contributions may provide no additional benefit.

It is therefore important to check your individual position before making a payment.

Why does it matter?

There are normally time limits on making voluntary NI contributions for previous years. However, HMRC's current exercise may give some affected individuals the opportunity to fill gaps going back to 2015/16.

For those who would benefit, making voluntary contributions could be a relatively cost-effective way of increasing their retirement income.

If you've received a letter from HMRC and aren't sure whether you should make voluntary contributions, speak to SJC, Chartered Accountants. We can help you review your position and determine whether filling any gaps could improve your State Pension entitlement.