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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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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.