In the case of Gadsen v HMRC [2026] UKFTT 720 (TC), the FTT has upheld the appeal against an HMRC decision refusing permission to make Class 2 National Insurance contributions out of time in respect of the period from 26 April 1981 to 5 April 2014 such that those contributions could be treated as paid for the purposes of contributory benefits, in particular entitlement to the state pension.
National Insurance contributions – Class 2 – late payment – ignorance or error – due care and diligence – reliance on professional advisers – deficiency notices – State Pension entitlement
Mr Gadsen, a barrister, had engaged professional advisers over the period and had diligently made returns and paid substantial income tax liabilities and Class 4 NIC contributions, however because of an oversight he had not registered for or paid Class 2 contributions meaning that he was not entitled to the full state pension. Regulation 6 of the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations 2001 allows a contribution paid after the statutory time limit to be treated as paid for contributory benefit purposes where the failure to pay in time was attributable to the contributor’s ignorance or error and where that ignorance or error was not due to any failure on the contributor’s part to exercise due care and diligence. HMRC asserted that his failure to pay arose from such a failure to exercise due care and diligence, but the FTT did not agree.
“Taking all matters together and applying the multifactorial approach mandated by Kearney to the facts before us, we are satisfied that the Appellant has discharged the burden of proof. He took positive and reasonable steps at the outset by appointing professional advisers, remained engaged with his affairs, paid substantial National Insurance contributions of another class and had no sufficiently obvious reason to distrust the advice he was receiving or to believe that a separate obligation had been overlooked.
This is not a case of doing nothing. It is a case of doing something which, on the authorities, can amount to due care and diligence. We have concluded that the Appellant’s ignorance or error was not due to any failure on his part to exercise due care and diligence within the meaning of regulation 6.
Having found that the conditions in regulation 6 of the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations 2001 are satisfied, we consider whether any factor would justify the discretion not being exercised in the Appellant’s favour. On the facts as found, and for the reasons set out above, we see no such factor.”
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/720
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