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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: settlement: posting (allocating) contributions to an employee’s NI account - how to decide whether to post contributions

The following questions will help the decision on whether or not to allocate:

  • Do the employees earn between the lower earnings limit (LEL) and the upper earnings limit (UEL)?

Unless the employees fall into this bracket there is no potential for significant impact (COG908091).

  • Do the additional earnings average more than £5 per week per individual over a whole year?

In other words do the individuals additional earnings on which NICs are due amount to no more than £265 in any one tax year?

This is important because it has been agreed with the Department of Work and Pensions that there is negligible impact on future benefit or pension entitlement below this figure.

Where the answer is YES you must

  • obtain sufficient information for recording on the individual’s account, and
  • use the best evidence available to do so.

This information may have to be obtained

  • by questioning the employer rather than reviewing records, or
  • asking the employer to provide the information.

It may mean allocating equally the total primary NICs computed amongst the individuals involved.

Where it is clear that the above limits will not be met (with the exception of those individuals whose earnings fluctuate around the LEL (COG908091), you should not spend any a great deal of time extracting information.

On the rare occasions where all attempts to identify individuals fail no allocation can take place.

Where this occurs you should record the situation on the Intervention Plan.