HM Revenue & Customs has confirmed the process for claiming National Insurance refunds, with the average pay-out totalling around £890. Brits can apply for a refund if HMRC has sent a letter about overpaying NI contributions or those paid in error by an employer. Under the rules, you can only apply if you receive a letter from the tax collector informing you there may be a refund due.
Average refund and number of claimants
A HMRC spokeswoman confirmed the average refund total, adding that 94,382 NI refunds were issued up to the 2025-26 tax year. The figure includes refunds to employers and individuals whose pockets will have received a boost. It also relates to a number of previous tax years before 2025-26, although HMRC does not keep a breakdown by tax year. The total could include cases going back beyond six years and older tax years where excess contributions were made.
Two main circumstances for refunds
HMRC's spokeswoman said refunds are paid in two main circumstances. The first is where NI has been paid in error. She added: "This must normally be claimed within six years of the relevant tax year." The second circumstance is where contributions exceed the annual maximum, for which there is no time limit to claim.
How to apply
Before making a refund claim, you will need the reference number on the letter sent by HMRC. You can't make a claim without one. You should also have to hand your bank or building society details and, if it applies to you, check the values of your Class 2 and Class 3 NI contributions are accurate. These should be in the letter. Class 2 NI is a flat, weekly rate for the self-employed while Class 3 refers to voluntary NI contributions. If there is no mention of Class 2 or 3 then HMRC records will show you neither paid nor received these. You can apply for a refund at the Gov.uk website or use the form on the back of the letter and post it to the address at the top. HMRC should then check your application and write to you to let you know if you are due a refund.
Who pays National Insurance
NI is paid by those aged 16 or over who are either employed and earning over £242 per week in a single job or by self-employed people whose profits are higher than £12,570 a year. It counts towards the new and basic state pension as well as a number of other benefits, including contribution-based Employment and Support Allowance.
