HMRC has identified an issue that may have left around 800,000 self-employed taxpayers with gaps in their National Insurance (NI) record, which could affect how much State Pension they receive. Here's what happened, who's affected, and what to do next.

What's the issue?

If you became self-employed between 2015 and early March 2024, you were required to tell HMRC by completing a form called CWF1 when you registered.

Many people didn't realise this was needed separately - even if they correctly declared their self-employment on their Self Assessment tax return. As a result, their Class 2 National Insurance contributions weren't recorded properly, leaving a gap in their NI record.

Class 2 NI contributions count towards your entitlement to the State Pension and certain other benefits, so a gap here really matters.

The good news: HMRC has already fixed the underlying issue for the 2024/25 tax year onwards. You may just need to correct the record for earlier years.

Who's affected?

Anyone who registered as self-employed between 2015 and early March 2024 and didn't separately submit a CWF1 form.

What is HMRC doing about it?

HMRC is taking a phased approach:

• If you're above State Pension age, or within two years of it: you're one of an estimated 160,000 people HMRC will write to directly, with letters going out by summer 2027. If you're already receiving your pension, you may also get any pension arrears you're owed.
• If you're not yet close to State Pension age: you won't hear from HMRC before spring 2027.
• HMRC is also upgrading its Check your State Pension forecast tool, so affected taxpayers will be able to see any gaps for themselves and pay voluntary contributions to fill them.

Importantly, if you're affected, HMRC says you'll be able to pay further back than the usual six tax years, and at the original rate that applied at the time - soyou won't be penalised for the delay.

HMRC has also confirmed it is not actively chasing anyone for unpaid contributions as a result of this issue.

What should you do right now?

Don't contact HMRC or the Department for Work and Pensions yet, they've specifically asked people not to while they work through the fix.

Instead, you can check things yourself:

1. Look back at your Self Assessment tax returns for the years in question.
2. Log into your online HMRC account to see whether Class 2 NI contributions were recorded.

This won't fix anything immediately, but it will help you understand whether you're likely to be affected and it means you're ready to act once HMRC's updated forecast tool is live.

A reminder: paying Class 2 NI voluntarily

Separately from this issue, it's worth knowing that anyone can pay voluntary Class 2 contributions to fill gaps in their NI record - for example, if you didn't pay through Self Assessment, or lived and worked abroad. Usually, voluntary contributions can only be backdated six tax years, so the extended window being offered here is a genuinely valuable concession for those affected.

Need help?

If you think you might be affected, or you'd like help checking your NI record or State Pension position, get in touch with our team. We're happy to help you make sense of it.

‍

_{This information is based on current HMRC guidance and may be updated as the situation develops.
This is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.}

‍