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HMRC have issued a statement which is aimed at helping individuals decide whether to pay voluntary Class 3 National Insurance Contributions.

The Pensions Bill received its second reading in the House of Lords on 14 May 2007. When the Bill becomes law it will reduce the number of qualifying years needed to qualify for a full basic State Pension from 39 for women and 44 for men to 30 years for those reaching State Pension age on or after 6 April 2010. There is no change to the number of qualifying years needed for entitlement to Bereavement Benefits.

The Paymaster General, jointly with the Department for Work and Pensions, issued a press release on 16 January 2007 concerning refunds of voluntary contributions (see link below). The press release advised that contributors may be entitled to a refund if they have continued to make voluntary NICs since 25 May 2006 but were unaware of the Government’s intention to reduce the number of qualifying years required for a full basic State Pension.

HMRC are now in a position to provide more details about the administrative arrangements for making refunds following the Government's announcement. HMRC will make refunds to people who apply for a refund and satisfy the following conditions:

• reach State Pension age on or after 6 April 2010;
• paid voluntary contributions on or after 25 May 2006 (the date the Pension White Paper was published) but before the Pensions Bill receives Royal Assent (expected to happen in Summer 2007); and
• were not aware of the changes when they paid. This means that at the time they paid they had not received information from HMRC about the changes.

Customers in the UK and paying voluntary Class 2 NICs should apply for a refund by:

• completing the application form;
• telephoning the Self Employed Contact Centre on 0845 915 4655;
• writing to the National Insurance Contributions Office, Self Employment Services, Benton Park View, Newcastle Upon Tyne, NE98 1ZZ.

Customers in the UK and paying Class 3 National Insurance Contributions should apply for a refund by:

• completing the application form;
• telephoning the National Insurance Helpline for Individuals on 0845 302 1479;
• writing to National Insurance Contributions Office, Refunds Group, Benton Park View, Newcastle Upon Tyne, NE98 1ZZ.

Customers living outside the UK should apply for a refund by:

• completing the application form;
• telephoning the Residency Helpline on +44 191 203 7010, if calling from abroad or 0845 91 54811 from the UK.
• writing to Charity, Assets and Residence – Residency, BP1301, Benton Park View, Newcastle Upon Tyne, NE98 1ZZ.

Related News

NIC refunds up for grabs 

Link

HMRC: Refund of Voluntary Contributions following announcement by Paymaster General on 16 January 2006