There are hundreds of sub-postmasters up and down the country who run their sub-post office as part of another business such as a corner shop.
The DSS policy is that sub-postmasters are employed earners. They are office holders of the Post Office and are, therefore, liable to pay Class 1 National Insurance contributions on their Post Office salary like other employees.
However, many also run their own businesses and they show their Post Office salary in their self-employed business accounts.
The DSS includes that salary when calculating the flat rate Class 2 and profits-related Class 4 National Insurance contributions paid by self-employed earners even if the salary has already been subject to Class 1 National Insurance contributions.
Peter Bickley of The Faculty of Taxation at The Institute of Chartered Accountants has lobbied the DSS to change the system, but to no avail.
Mr Bickley said: 'It is inequitable that the Post Office salary attracts Class 1 NIC on payment and then is again taken into account when calculating the liabilities to Classes 2 and 4 NICs.
'We have made suggestions for change to the DSS but they have said at present there were no plans to review their stance.'
A DSS spokesman confirmed that there are two distinct NI liabilities.Reuse content