800,000 taxpayers may have gaps in NI records
According to the Chartered Institute of Taxation (CIOT), HMRC and the DWP are sending letters to certain taxpayers who became self-employed between 2015 and early 2024, regarding failure to register self-employed status for National Insurance contribution (NIC) purposes.
Such taxpayers who did not complete a CWF1 to register their self-employment may not have paid enough Class 2 NIC and, as a result, may have gaps in their NI record which could affect their State Pension entitlement.
HMRC thinks that approximately 800,000 customers may have gaps in their NIC history because of this issue. Based on current HMRC data, it’s estimated around 160,000 customers aged above, or within two years of, State Pension age may be affected. It is these taxpayers who are set to receive a letter.
How the State Pension is taxed
HMRC has released new guidance to explain that the State Pension is taxable income but tax is not taken off at source. HMRC bases a full year’s State Pension on:
- one week at the weekly rate before the amount changes in April
- 51 weeks at the weekly rate after the amount changes in April.
HMRC uses the amounts a taxpayer was entitled to get over the tax year, rather than the payments they actually received.
https://www.gov.uk/guidance/how-your-state-pension-is-taxed
Public service pensions remedy newsletter - July 2026
HMRC has issued a newsletter to update stakeholders on the latest news on the public service pensions remedy. The newsletter includes articles on:
the public service pension schemes (rectification of unlawful discrimination) (tax) regulations 2026;
extending the scheme pays election deadline;
voluntary scheme pays deadline; and
making scheme pays elections via the ‘calculate your public service pension adjustment’ tool.
https://www.gov.uk/government/publications/public-service-pensions-remedy-newsletter-july-2026