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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 - process to follow

NIRS Calculation Support

The NICs calculation tool within NPS is called NIRS Calc Support. All NICs calculations should be made using NIRS Calc Support.

There are a number of benefits from using NIRS Calculation Support:

  • information already held on NPS can be included in the calculation
  • the calculation of NICs is accurate
  • the system produces a breakdown of the calculation taking account of what has already been paid
  • the system clearly shows whether arrears are due or whether there has been an overpayment
  • the calculation can be printed out
  • the printout provides information in a format that allows NPS to be accurately updated with the correct information
  • a nationally consistent process is used

Calculating NICs Due

In normal circumstances the steps to be followed are set out in the following attachments. These calculations should be completed prior to the issue of computations to the employer or their accountant.

  • Steps to follow where the employee is a director of the company (COG908103).
  • Steps to follow where the employee is not a director of the company (COG908104).
  • Procedure to be used when a NPS account cannot be traced (COG908105).

There may be circumstances when it is not possible to accurately determine precise earnings. In such circumstances you should proceed in accordance with COG908091 onwards.

Sending Details of NICs Postings to NIC&EO

At the conclusion of the case

  • a copy of the NIRS2 Calc Support printout should be sent to NIC&EO with the ECR304 and should include a note to confirm whether the contributions are

  • a further copy of the NPS calculation should be retained on the EC papers.

Where the only arrears due are secondary NICs there is no need to send details to NIC&EO as they are not used to calculate entitlement to contribution based benefits.

NIC&EO Action

Using the information from the NIRS Calc Support printouts NIC&EO will access the relevant NPS account and amend the details in the contribution folder.