Unfortunate omission

The taxpayer had been self-employed since 1989. When she turned 60 she discovered her state pension was less than she expected because she had not paid class 2 National Insurance (NI) contributions.

She applied to pay the contributions so that her pension would be increased but HMRC refused. The department accepted her failure was a result of error or ignorance on her part but said she had shown a lack of due care and diligence.

The taxpayer appealed.

The First-tier Tribunal said the taxpayer could be regarded as ignorant about NI because she used professional advisers to prepare her accounts and returns and a “reasonably competent accountant would have been aware of the National Insurance scheme and the obligation on self-employed earners to pay class 2 contributions”.

But she had registered as self-employed and must have known she was supposed to pay NI contributions. She had...