In Richard Thomas v HMRC [2016] UKFTT 0735 the First Tier Tribunal (FTT) allowed the taxpayer to make late Class 2 NIC payments and carry them back to earlier years.

  • Mr Thomas had a mixture of employment and self-employment during 1966 to 2014.
  • During this time NICs changed significantly, including moving from contribution cards that had to be stamped to computer based records, and the introduction of Class 4 NICs.
  • Mr Thomas asked his accountant about NICs and was told by his accountant that Class 4 NICs contributed to his State Pension, and he was paying these but was not aware of the different classes or the requirement to make other payments.
  • The introduction of Class 4 NICs coincided with Mr Thomas resuming self-employment and could have contributed to his confusion.
  • Mr Thomas registered for VAT when he was made aware of the obligation to do so (albeit late) and paid up all liabilities.

Mr Thomas accepted that the missed payments were due to his ignorance or error, but was of the view that the error was not due to his failure to exercise due care and diligence.

The FTT agreed and found that the evidence was that Mr Thomas took due care and diligence over his tax affairs generally and this was not the reason for his ignorance or error.

Mr Thomas was allowed to pay late Class 2 NIC contributions and carry them back to earlier years.


Abolishing Class 2 NICs: consultation response

Case reference: Richard Thomas v HMRC [2016] UKFTT 0735