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Twisted kNICkers

Are HMRC confused about whether a liability to class 2 National Insurance arises on income from property?

KEY POINTS

  • Client receives a letter from HMRC contending that a National Insurance liability has arisen for previous years but no copy is sent to the agent.
  • HMRC are contending that class 2 National Insurance contributions are arising in respect of property rentals.
  • In the case of Rashid v Garcia the Special Commissioners concluded that class 2 contributions were not payable on let property.
  • HMRC appear to have ignored the Rashid case and also the answers to their own questionnaire and have not fully explained their reasoning.
  • There appears to be an ongoing campaign by HMRC to impose a class 2 National Insurance contributions liability on let properties.

In May I received a scanned copy of an HMRC letter from a worried client. It was a demand for...

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