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People who reach state pension age before 6 April 2016 can now top up their state pension by paying a new class of voluntary National Insurance contributions (NICs) – Class 3A.

First announced in the 2013 Autumn Statement, the new Class 3A NICs went live on 12 October 2015. The opportunity to pay the top-up runs until 5 April 2017. Paying it can provide between £1 and £25 extra per week.  

Who can pay Class 3A NIC?

Those eligible to use the top-up opportunity are: ​​

  • existing state pensioners, and
  • people entitled to a UK state pension who have not reached state pension age but will do so before 6 April 2016. This means men born before 6 April 1951 and women born before 6 April 1953.

The Class 3A opportunity is aimed at women and other groups who have done less favourably under the existing state pension rules and have not previously been able to top up their pension. It will also provide an opportunity for pensioners to improve their retirement income by obtaining inflation-proofed extra additional state pension.

How to pay
The government has published a table showing amounts of the Class 3A voluntary contributions that contributors must pay to obtain an additional £1 per week of state pension. The amount of a Class 3A contribution reduces with age. Thus someone aged 70 can increase their state pension by £1 per week by paying £779.

The government has said that Class 3A NIC rates have been set to ensure an equitable deal for both individual contributors and taxpayers. 

The Class 3A NICs are paid as a lump sum. There is a cooling off period of 90 days from payment during which a refund can be obtained; this applies also to the estate of a person who dies during that period.

The government’s State pension top up web page has details of how to apply and a link to a calculator.

Class 3A options
The additional pension purchased with Class 3A NIC: 

  • will increase in line with the Consumer Price Index (if living in a country where UK state pensions are inflation linked),
  • will be inheritable on death, ie a surviving spouse will be entitled to at least 50% of the additional pension,
  • will be taxable, and
  • will be taken into account in any assessment of income-related means-tested benefits, including pension credit, housing benefit and help with council tax.

As this is a potentially complicated area, those considering Class 3A top-up should do the sums and it may be best to take advice. Wolfson Associates cannot give advice but here are some things to think about. 

For people who have gaps in their contributions record (ie not enough years), it may be better voluntarily to pay Classes 2 or 3 NIC. See the government’s guidance on voluntary payment of NIC. Note that the ability to pay Class 2 NIC voluntarily rather than the more expensive Class 3 is restricted to the self-employed with small profits or losses and to certain people living and working overseas.

Class 3A top-up is probably best for people reaching state pension age before April 2016 who have a shortfall in their state pension and some spare money that they might consider using for extra retirement income; for those (mainly women) who did not manage to accrue rights to the additional state pension while they were working; for the self-employed who were excluded from the additional state pension system altogether; and for lower earners who lost out because the additional state pension was earnings-related. 

It might not be so good for people in ill health and therefore with a short life expectancy because they will not receive the additional income for as long as a more healthy individual. Similarly, someone who is single and does not need provision for a surviving partner might not find this such an attractive deal.

An alternative for those who are not yet receiving their state pension is to defer receiving it. According to the government’s guidance on deferment, those who delay claiming state will receive an extra 1% for every 5 weeks that the claim is delayed. This is the same as 10.4% for every full year that claiming is delayed.


Companies House (CH) has launched a FREE service to search company information and document images (Accounts and CH documents).  The service allows the public to access 170 million digital records without the need to register or pay. To access the service click here.


The R40 is the form which taxpayers can use to claim a repayment of tax deducted from savings income.

HMRC has updated the web page Income Tax: claim for repayment of tax deducted from savings and investments (R40) with new details of where to send the R40:

People who have employment income, occupational pension income, incapacity benefit, employment support allowance or jobseekers’ allowance should send the completed R40 form to:

HM Revenue and Customs
PAYE and Self Assessment
United Kingdom

All other R40 repayment claims should be sent to:

HM Revenue and Customs
Leicester and Northants (Claims)
Saxon House
1 Causeway Lane

Neither the R40 itself, nor the notes which accompany it, provide these address details. The form cannot be submitted online.

Those not resident in the UK should use from R43. Those in self assessment can claim a repayment using their SA tax return


The rates which employers can use to reimburse employees who pay to put petrol in their company cars when they are using them for business have been updated. These rates apply to all journeys undertaken on or after 1 June 2015 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose.


HMRC has issued a change in practice on penalties for late filing of personal tax returns.

What’ has changed? The law provides for an automatic penalty of £100 if a personal tax return is even a day late (and more than that if it’s more than 3 months late). But no penalty is due if you have a "reasonable excuse" for the delay. You can appeal within 30 days of the issue of the penalty, using form SA355.


HMRC have updated their list of such vehicles. VAT registered businesses can use this list to determine if VAT can be reclaimed as input tax on particular makes and models of car derived vans and combi vans. To access the list click here.


HMRC has issued revised guidance to assist with the identification of expenses and categorising them as to "Business" and "Private" expenditure. To access the toolkit click here.


Who is likely to be affected?
Employers with employees under the age of 21.

General description of the measure
From 6 April 2015 every employer with employees under the age of 21 will no longer be required to pay Class 1 secondary National Insurance contributions (NICs) on earnings up to the upper earning limit (UEL), for those employees.

Proposed revisions
Under proposals and subject to earnings up to the UEL, employers who employ or engage employees under the age of 21 at or after 6 April 2015 will not be required to pay employer NICs on the earnings they pay to those employees. The UEL in 2015-16 is expected to be £813 per week (annual equivalent £42,285).

For more detailed information click here.


The rates which employers can use to reimburse employees who pay to put petrol in their company cars when they are using them for business have been updated. These rates apply to all journeys undertaken on or after 1 March 2015 until further notice. For one month from the date of change, employers may use either the previous or new current rates, as they choose.


The government has announced that the official rate of interest will be 3% from 6 April 2015. This will be a fall from the current rate of 3.25%.

The official rate of interest is used in calculating the benefit-in-kind charge on beneficial loans to employees and on living accommodation provided for an employee or director. It is also use in calculating the pre-owned asset charge on assets other than land.

The GOV.UK website has tables of the current and all previous rates

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