by Nathalie Knowles BBC Radio 4

The Inland Revenue has contacted 42,000 self-employed people to ask for National Insurance contributions it failed to collect in 1998.

The Revenue says these people were not billed between 12 July to 10 October 1998, due to problems with its computer system.

The affected people are now expected to make up the shortfall, as any gap in contributions can affect their state retirement pension.

Money Box listener Christine Murray Watson contacted the programme after she received one of the bills.

Outrage

"I am understandably outraged by this." Mrs Murray Watson told the BBC.

"Apart from the shock of an unexpected demand... I fail to see why an organisation should be able to make good its own mistakes after a four year delay.

And Mrs Murray Watson was shocked to find the demand gave the impression she had to make the payment under normal terms, which means within 28 days of receiving the new bill.

"I do not suppose I have any choice except to pay by the beginning of October without putting my pension at hazard." Mrs Murray Watson told Money Box.

Compensation

Technical blunders have plagued the Inland Revenue.

Problems with the NIRS2 computer system for handling National Insurance contributions have been well documented in the past.

Installation delays and technical problems have led to millions of pounds in compensation being paid out.

But the Revenue claims the system has been working properly since April 2000.

Planned work

When approached by Money Box a spokeswoman from the Revenue said:

"This was a planned piece of work, which has been scheduled for some time, in order to collect the underpayments which are properly due.

"The delay in notifying the contributor is Inland Revenue's responsibility so no late payment premium will be charged.

"Inland Revenue regrets the inconvenience to contributors who are affected."

If any individuals' circumstances changed during the period 12 July 1998 to 10 October 1998 they should contact the National Insurance Contributions Office on telephone number 0845 9154655.