Latest news with #NationalInsuranceContribution
Yahoo
7 days ago
- Business
- Yahoo
HMRC bills workers for tax it abolished last year
HM Revenue & Customs (HMRC) has accidentally billed workers for a tax that was abolished last year. Class 2 National Insurance (NI) contributions were effectively scrapped for self-employed people in April 2024. However, workers have reported that HMRC is still adding the levy of £179.40 to their tax bill despite now being exempt. Some have been told to pay twice this amount – £358.80. Experts said it was 'ridiculous' that HMRC was getting self-employed NI calculations wrong when it was quick to fine workers for errors navigating the 'complex' tax system. A source told The Telegraph there were indications the problem was 'very widespread'. HMRC said it was 'working urgently' to resolve the issue. The reason for the error is unknown, but the problem is understood to have arisen as a result of the changes announced in the autumn 2023 Budget that came into effect for the 2024-25 tax year. The rule change means self-employed workers now receive a credit for Class 2 NI, which boosts entitlement to 'contributory' benefits such as the state pension, as long as their profits are above £6,725. As a result, they do not need to pay Class 2 NI, but can still use the credit to improve their entitlements. Anyone with profits below £6,725 can opt to pay the tax voluntarily at a rate of £3.45 per week, adding up to £179.40 a year. The Association of Taxation Technicians (ATT), a professional body for the tax compliance industry, said its members had reported receiving one of three letters containing errors from HMRC. The first said the Class 2 NI tax sum had been 'amended' to zero, which made the letter unnecessary. The second wrongly demanded £179.40 in tax, while the third demanded twice this amount. Michelle Denny-West, a tax partner with accountancy firm Moore Kingston Smith, said: 'The National Insurance Contribution (NIC) system for self-employed individuals has always been confusing, but the fact that HMRC cannot get this right is ridiculous. 'It's frustrating that taxpayers are expected to navigate such a complex tax system and can be charged penalties and interest for mistakes – yet they are now also expected to correct HMRC's mistakes. 'The risk here is that some individuals will unwittingly pay the additional NICs without realising it's a bill they should not be paying.' Helen Thornley, of the ATT, said: 'Our members have reported a number of problems with national insurance calculations for 2024-25. Most self-employed individuals are not required to pay Class 2 contributions following changes announced at last year's Budget. 'However, many have received letters from HMRC which have added charges of almost £180 in Class 2, and in some instances double that amount. 'We have reported all examples to HMRC, who have assured us that this is being investigated 'as a matter of urgency'. 'However, it is still not clear what the reason behind the issue is. In the meantime, anyone affected should contact HMRC to ask for a resolution.' An HMRC spokesman said: 'We apologise to those affected and we're working urgently to resolve this issue.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
7 days ago
- Business
- Yahoo
HMRC bills workers for tax it abolished last year
HM Revenue & Customs (HMRC) has accidentally billed workers for a tax that was abolished last year. Class 2 National Insurance (NI) contributions were effectively scrapped for self-employed people in April 2024. However, workers have reported that HMRC is still adding the levy of £179.40 to their tax bill despite now being exempt. Some have been told to pay twice this amount – £358.80. Experts said it was 'ridiculous' that HMRC was getting self-employed NI calculations wrong when it was quick to fine workers for errors navigating the 'complex' tax system. A source told The Telegraph there were indications the problem was 'very widespread'. HMRC said it was 'working urgently' to resolve the issue. The reason for the error is unknown, but the problem is understood to have arisen as a result of the changes announced in the autumn 2023 Budget that came into effect for the 2024-25 tax year. The rule change means self-employed workers now receive a credit for Class 2 NI, which boosts entitlement to 'contributory' benefits such as the state pension, as long as their profits are above £6,725. As a result, they do not need to pay Class 2 NI, but can still use the credit to improve their entitlements. Anyone with profits below £6,725 can opt to pay the tax voluntarily at a rate of £3.45 per week, adding up to £179.40 a year. The Association of Taxation Technicians (ATT), a professional body for the tax compliance industry, said its members had reported receiving one of three letters containing errors from HMRC. The first said the Class 2 NI tax sum had been 'amended' to zero, which made the letter unnecessary. The second wrongly demanded £179.40 in tax, while the third demanded twice this amount. Michelle Denny-West, a tax partner with accountancy firm Moore Kingston Smith, said: 'The National Insurance Contribution (NIC) system for self-employed individuals has always been confusing, but the fact that HMRC cannot get this right is ridiculous. 'It's frustrating that taxpayers are expected to navigate such a complex tax system and can be charged penalties and interest for mistakes – yet they are now also expected to correct HMRC's mistakes. 'The risk here is that some individuals will unwittingly pay the additional NICs without realising it's a bill they should not be paying.' Helen Thornley, of the ATT, said: 'Our members have reported a number of problems with national insurance calculations for 2024-25. Most self-employed individuals are not required to pay Class 2 contributions following changes announced at last year's Budget. 'However, many have received letters from HMRC which have added charges of almost £180 in Class 2, and in some instances double that amount. 'We have reported all examples to HMRC, who have assured us that this is being investigated 'as a matter of urgency'. 'However, it is still not clear what the reason behind the issue is. In the meantime, anyone affected should contact HMRC to ask for a resolution.' An HMRC spokesman said: 'We apologise to those affected and we're working urgently to resolve this issue.'
Yahoo
06-04-2025
- General
- Yahoo
Schools welcome new and expanded nurseries
More than 40 primary schools across north-west England will get new or expanded on-site nurseries under a £37m government scheme. Schools across the country were invited to apply for funding to create new nurseries or add additional places at their current ones. A total of 42 schools across the region have been awarded funds. While the National Day Nurseries Association (NDNA) said the expansion could help create places in areas where there is was capacity, it warned "they must not threaten the existing high-quality provision". Niall Owens, head teacher of St Oswald's Catholic Primary School in Coppull, said the news arrived on 1 April "so we were slightly sceptical". "It was hard to believe at first," Mr Owens said. "We are delighted that we will be able to use surplus space to welcome three-year-olds into the school. "Pupils will receive a high-quality nursery education, which will ensure they are ready for the challenges of primary school." Alex Borrill, head teacher of Woodchurch Road Academy in Oxton, said the news of the funding came "later than we had hoped", which made the preparation for the September term "a bit more challenging". "This was an opportunity we couldn't let pass. The application window was tight, but we knew it was a priority and one we needed to pursue. Without this funding, making this project a reality would not have been possible." Jo Grundy, head teacher at Unsworth Primary School in Bury, said as well as the government finance, it had also received additional funding from its trust, Oak Learning Partnership, to build its new preschool. "Having a preschool within a school setting makes the transition from nursery to school so much easier for children as they are already familiar with their new environment and routines," Ms Grundy said. Jason Elsom, chief executive of non-profit Parentkind said many parents "struggle with finding good quality childcare". "Parents with more than one child may be saved from the mad dash from nursery to school in the morning and afternoon," he said. "We know that childcare is a major headache for parents with young children, from the exorbitant cost, to finding a reliable local place for their children. "[The grant] will enable even more schools to help the children in their care to be school ready before moving from nursery to reception, giving them the best start in life." The NDNA said "with existing providers facing issues of underfunding, higher staffing costs and local recruitment challenges, these new nurseries must not damage or undermine established early years settings". "From the start of this month, private and voluntary providers are facing huge increases in their operating costs, including statutory wage increases, new National Insurance Contribution costs and utility bills to name a few," the executive chair of the NDNA, Purnima Tanuku CBE, said "Nurseries across the country have already started to work with schools and families of children making the important transition into school. It is wrong to suggest that school nurseries are better for children transitioning into reception." Overall, 300 schools across England are creating new or expanded nurseries under the scheme. The government recently announced the rollout of 30-hour, centrally-funded childcare per child from September, which it said would save parents up to £7,500 on average. Read more stories from Cheshire, Lancashire, Greater Manchester and Merseyside on the BBC, watch BBC North West Tonight on BBC iPlayer and follow BBC North West on X. Department for Education Parentkind National Day Nurseries Association 'National Insurance rise may force us to close' Childcare costs fall for the first time in 15 years – but nurseries are worried Who can get 15 and 30 hours of free childcare?
Yahoo
06-04-2025
- General
- Yahoo
Schools welcome new and expanded nurseries
More than 40 primary schools across north-west England will get new or expanded on-site nurseries under a £37m government scheme. Schools across the country were invited to apply for funding to create new nurseries or add additional places at their current ones. A total of 42 schools across the region have been awarded funds. While the National Day Nurseries Association (NDNA) said the expansion could help create places in areas where there is was capacity, it warned "they must not threaten the existing high-quality provision". Niall Owens, head teacher of St Oswald's Catholic Primary School in Coppull, said the news arrived on 1 April "so we were slightly sceptical". "It was hard to believe at first," Mr Owens said. "We are delighted that we will be able to use surplus space to welcome three-year-olds into the school. "Pupils will receive a high-quality nursery education, which will ensure they are ready for the challenges of primary school." Alex Borrill, head teacher of Woodchurch Road Academy in Oxton, said the news of the funding came "later than we had hoped", which made the preparation for the September term "a bit more challenging". "This was an opportunity we couldn't let pass. The application window was tight, but we knew it was a priority and one we needed to pursue. Without this funding, making this project a reality would not have been possible." Jo Grundy, head teacher at Unsworth Primary School in Bury, said as well as the government finance, it had also received additional funding from its trust, Oak Learning Partnership, to build its new preschool. "Having a preschool within a school setting makes the transition from nursery to school so much easier for children as they are already familiar with their new environment and routines," Ms Grundy said. Jason Elsom, chief executive of non-profit Parentkind said many parents "struggle with finding good quality childcare". "Parents with more than one child may be saved from the mad dash from nursery to school in the morning and afternoon," he said. "We know that childcare is a major headache for parents with young children, from the exorbitant cost, to finding a reliable local place for their children. "[The grant] will enable even more schools to help the children in their care to be school ready before moving from nursery to reception, giving them the best start in life." The NDNA said "with existing providers facing issues of underfunding, higher staffing costs and local recruitment challenges, these new nurseries must not damage or undermine established early years settings". "From the start of this month, private and voluntary providers are facing huge increases in their operating costs, including statutory wage increases, new National Insurance Contribution costs and utility bills to name a few," the executive chair of the NDNA, Purnima Tanuku CBE, said "Nurseries across the country have already started to work with schools and families of children making the important transition into school. It is wrong to suggest that school nurseries are better for children transitioning into reception." Overall, 300 schools across England are creating new or expanded nurseries under the scheme. The government recently announced the rollout of 30-hour, centrally-funded childcare per child from September, which it said would save parents up to £7,500 on average. Read more stories from Cheshire, Lancashire, Greater Manchester and Merseyside on the BBC, watch BBC North West Tonight on BBC iPlayer and follow BBC North West on X. Department for Education Parentkind National Day Nurseries Association 'National Insurance rise may force us to close' Childcare costs fall for the first time in 15 years – but nurseries are worried Who can get 15 and 30 hours of free childcare?
BBC News
06-04-2025
- General
- BBC News
Schools welcome new and expanded nurseries in the North West
More than 40 primary schools across north-west England will get new or expanded on-site nurseries under a £37m government across the country were invited to apply for funding to create new nurseries or add additional places at their current ones.A total of 42 schools across the region have been awarded the National Day Nurseries Association (NDNA) said the expansion could help create places in areas where there is was capacity, it warned "they must not threaten the existing high-quality provision". Niall Owens, head teacher of St Oswald's Catholic Primary School in Coppull, said the news arrived on 1 April "so we were slightly sceptical". "It was hard to believe at first," Mr Owens said."We are delighted that we will be able to use surplus space to welcome three-year-olds into the school."Pupils will receive a high-quality nursery education, which will ensure they are ready for the challenges of primary school."Alex Borrill, head teacher of Woodchurch Road Academy in Oxton, said the news of the funding came "later than we had hoped", which made the preparation for the September term "a bit more challenging"."This was an opportunity we couldn't let pass. The application window was tight, but we knew it was a priority and one we needed to pursue. Without this funding, making this project a reality would not have been possible."Jo Grundy, head teacher at Unsworth Primary School in Bury, said as well as the government finance, it had also received additional funding from its trust, Oak Learning Partnership, to build its new preschool. "Having a preschool within a school setting makes the transition from nursery to school so much easier for children as they are already familiar with their new environment and routines," Ms Grundy said. 'A major headache' Jason Elsom, chief executive of non-profit Parentkind said many parents "struggle with finding good quality childcare"."Parents with more than one child may be saved from the mad dash from nursery to school in the morning and afternoon," he said."We know that childcare is a major headache for parents with young children, from the exorbitant cost, to finding a reliable local place for their children."[The grant] will enable even more schools to help the children in their care to be school ready before moving from nursery to reception, giving them the best start in life."The NDNA said "with existing providers facing issues of underfunding, higher staffing costs and local recruitment challenges, these new nurseries must not damage or undermine established early years settings"."From the start of this month, private and voluntary providers are facing huge increases in their operating costs, including statutory wage increases, new National Insurance Contribution costs and utility bills to name a few," the executive chair of the NDNA, Purnima Tanuku CBE, said"Nurseries across the country have already started to work with schools and families of children making the important transition into school. It is wrong to suggest that school nurseries are better for children transitioning into reception." Overall, 300 schools across England are creating new or expanded nurseries under the government recently announced the rollout of 30-hour, centrally-funded childcare per child from September, which it said would save parents up to £7,500 on average. Read more stories from Cheshire, Lancashire, Greater Manchester and Merseyside on the BBC, watch BBC North West Tonight on BBC iPlayer and follow BBC North West on X.
