Class 3 National Insurance contributions paid in error

The taxpayer was employed until 2015. She was 46 and had made 29 years of National Insurance contributions but needed 35 years to be entitled to a full state pension.

After leaving employment she had no income and for various reasons felt unable to obtain another job.

In 2017 the taxpayer contacted HMRC and paid £733.20 in voluntary class 3 contributions for 2016-17. She had not sought any advice about doing so.

In April 2018 the taxpayer became self-employed which entitled her to make voluntary class 2 contributions because her profits were below the small profits threshold.

She wrote to HMRC requesting that the class 3 contributions made in 2017 be refunded or reallocated to later years as class 2. HMRC refused.

The taxpayer appealed.

Under Social Security Contributions and Benefits Act 1992 s 13 individuals without employment income may pay class 3 contributions if they wish....