Supporting Guidance: employer compliance: guidance by subject: settlement: posting (allocating) contributions to an employee’s NI account - contributions ‘treated as paid’
Regulation 60, Social Security (Contributions) Regulations 2001 allows HMRC to ‘treat as paid’ unpaid primary Class 1 NICs that were payable on a contributor’s behalf by a secondary contributor (NIM12112).
Where NIC&EO are not advised that the arrears of contributions have been paid (COG908097), they will
- treat them as having been paid, and
- post the contributions to the individual’s NI account
- provided it has been clearly established that the failure to pay or the underpaid Class 1 NIC was not attributable to the contributor (NIM12115/NIM12116).
See (COG908100) for details of exceptions to ‘treating as paid’.
Such situations will arise when
- an instalment arrangement has been agreed
- certain years’ tax and NICs has not been recovered because of HMRC’s ‘Litigation and Settlement Strategy’
- the employer has become insolvent (COG906150)
- (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (COG906090)
- (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (COG906100)
- (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (COG915065)
In all the above situations it is important that NIC&EO are notified of any NIC unpaid and attributable to identified individuals.
In any cases where you decide that the unpaid contributions should not be posted you should provide a clear explanation for the decision on the papers.
Exceptions to treating NICs as paid are situations where the
- failure to pay was with the ‘consent or connivance’ of the employee (NIM12115) or
- attributable to any ‘negligence’ on the part of the employee (NIM12116).
See COG908100 for more information on these exceptions.