National Insurance case
A recent Special Commissioner case examined whether a taxpayer had elected to pay reduced National Insurance contributions. The taxpayer had appealed against a decision by HMRC that she had made an election to pay reduced or nil national insurance contributions in the period from 1967 to 1980. The reduced payments being facility available to her as she was a married woman. (This facility ceased to exist in 1975). The reduced payments had a significant impact on the entitlement of the taxpayer to a state pension. The election that HMRC contended the taxpayer had made was no longer held on record as such forms were destroyed after six years.
HMRC however were able to produce certain records to demonstrate their contention that an election had been made and reduced or nil payments had been made. The appeal was dismissed on the basis of the documentary evidence held by HMRC. The Commissioner commented that he did not believe the taxpayer was trying to mislead but was satisfied that her recollection “is not so reliable”.
This is an interesting case which demonstrates the importance of retaining documentary evidence and the reliance that the Commissioner places on HMRC’s records.