HMRC is worried about director National Insurance Contributions – Are yours accurate?
As different parts of financial regulations change, it can often feel like a challenge keeping pace with everything that needs to be done.
HM Revenue and Customs (HMRC) seems to understand this concern quite well as they are raising awareness of a potential issue with directors paying an incorrect amount of National Insurance (NI).
We want to highlight the issue so that you understand the risk and the steps you can take to make sure your tax bill is accurate and fully compliant.
What is the problem with director National Insurance Contributions?
For directors who are on PAYE, there is an increased risk that their National Insurance Contributions (NICs) may have been miscalculated and any discrepancies need to be addressed.
This is due to the NIC rates changing twice in 2024, once in January and then again in April, and these changes may not have been accurately reflected in all calculations.
HMRC is aware that in years where the NIC rates change, errors are more likely to occur so the double change is a cause for concern.
HMRC is strongly advising that any director on PAYE double check their calculations and self-correct through PAYE where possible.
If it is not possible to self-correct, it will be necessary to make a voluntary disclosure.
You should be aware that even through using the voluntary disclosure service, you may still face fines and penalties for submitting an incorrect tax return in the first place.
How can directors improve the accuracy of National Insurance Contributions?
Even in years where the NIC rates do not change, keeping track of all of your obligations can be difficult.
Having a team of experts on hand to guide you through all of your tax requirements is vital if you want to ensure you stay fully compliant.
While the voluntary disclosure service does exist for those who wish to make amends for their errors, it is better to provide accurate tax filings and fully pay what you owe from the outset.
If you are concerned that you may have underpaid your NICs, then we will be happy to run through the calculations to determine whether any error has occurred and update your records accordingly.
For all future NIC bills, we can monitor the current regulations and thresholds to provide accurate calculations that will avoid you having to make any future corrections with HMRC.
As a director, your focus can and should be on growing your business and striving for success.
That is why having a team of expert accountants is helpful as we can keep you compliant with HMRC while you focus on the business you love.
Don’t let changing rates risk your compliance with HMRC. Speak to our team today!
