NIM25033 - Class 3 NICs: time limits for paying Class 3 NICs: due care and diligence- factors to be taken into account

Regulation 50(2)(b) Social Security (Contributions) Regulations 2001

Regulation 65(3), Social Security (Contributions) Regulations 2001

NIM25030 explains that:

  • the time limits for the payment of Class 3 NICs may be extended, and
  • the application of the higher rate provisions would not be applied

if the two tests are satisfied. If the test for either of the above regulations is satisfied then they will be considered as being satisfied for both regulations.

NIM25032 explains that in:

  • Kearney v HMRC [2010] EWCA Civ 288
  • John R Goldsack v HMRC [2010] UKFTT 530 (TC)

the Court of Appeal and the First-tier Tribunal, respectively, gave guidance on the kind of relevant factors to be taken into account in deciding whether or not a person바카라 사이트檚 failure to pay Class 3 NICs timeously was the result of their failure to exercise due care and diligence. Those factors include the following:

  • the individual바카라 사이트檚 age
  • the individual바카라 사이트檚 nationality, including whether they had any language difficulties
  • the individual바카라 사이트檚 employment history,
  • the individual바카라 사이트檚 health: do, or did, they have any relevant physical disability
  • the individual바카라 사이트檚 knowledge of the NI Scheme, including:
  • the source of that knowledge; i.e. whether from the Department, an employer (or former employer), or some other third party (for instance, a friend, a work colleague, another 바카라 사이트 department
  • the extent of the knowledge
  • the individual바카라 사이트檚 NI record including
  • what NICs have been paid or credited
  • what benefit claims, if any, have been made, and, where made, the type of benefit(s) claimed and the outcome of the claim(s)
  • what enquiries the individual made about paying Class 3 NICs, including:
  • when they made the enquiries
  • what information or advice they were given
  • the extent and nature of the action or inaction that the individual took, especially in relation to the making of enquiries about the possibility of paying Class 3 NICs

The above list of factors is not exhaustive. The Court of Appeal made it clear that it didn바카라 사이트檛 consider it possible to produce a definitive list of relevant factors. So other factors might be relevant depending on the nature of the particular case in question.

Once all the relevant factors have been established, they should be:

바카라 사이트�바카라 사이트alanced together to reach an assessment or evaluation on a case-by-case basis as to whether due care and diligence was exercised and, if not, whether the failure was the cause of the contributor바카라 사이트檚 ignorance바카라 사이트�바카라 사이트� (Kearney at paragraph 34).

In carrying out that balancing exercise it is important to remember that simply because an individual has some knowledge of the NI Scheme, it does not automatically follow that they can show that they exercised due care and diligence only if they made further enquiries about their entitlement to pay. It will all depend on the facts and circumstances in any particular case. But as the Court of Appeal said, at paragraph 36, in Kearney:

바카라 사이트�바카라 사이트t will be an unusual case in which a person is able to show that, while he made no contributions even after learning the basic features of the NIC scheme, he nonetheless exercised due care and diligence.바카라 사이트�