HM Revenue & Customs (HMRC) will soon start writing to up to 800,000 self-employed taxpayers who may have gaps in their National Insurance Contributions (NIC) that could affect the amount of state pension that they receive.
HMRC said it has identified an issue that potentially affects those who became self employed between 2015 and early March 2024.
Individuals who failed to inform HMRC that they became self employed by completing form CWF1 may not have paid enough Class 2 NICs, even if they registered for self-assessment. This could affect the amount of state pension they receive.
Up to 800,000 taxpayers may have be affected, including around 160,000 people who are around state pension age. HMRC said it will write to those potentially impacted, starting with people at, or within two years of, state pension age. Those letters will be sent by summer 2027.
It will also upgrade the ‘check your state pension forecast’ tool so taxpayers can identify any NIC gaps and make voluntary contributions.
Voluntary contributions can usually only be backdated by six years, but HMRC said those affected by this issue will be able to make payments as far back as 2015/16.
According to MoneySavingExpert, HMRC has urged people to not contact the tax authority about the issue or attempt to complete the CWF1 form retrospectively as it “could disrupt” the process of fixing it.
For those who have become self-employed since 2024/25, HMRC said it has corrected the problem.