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HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: settlement: steps to follow where the employee is a director of the company

NPS Process - Director

  • Use the name, NINO and additional pay details to calculate NICs due.
  • Access NIRS by selecting the NIRS Person icon.
  • Enter the NINO and confirm that the correct NPS account has been accessed.
  • Select the blue ‘Contributions’ tab. This will bring up a list of the last six contribution years.
  • Select, by double clicking, the relevant entry for the relevant year (make sure you don’t double click the ‘totals’ line). This will bring up the P14.
  • Take a note of the total NI paid and the employee (primary) NI paid details.
  • Select ‘Options’ on the toolbar then select ‘View Class 1 Employment History’. Confirm that you have the correct employer from the employer details shown on the screen. From this screen note only the gross pay details of the current employment for the employer concerned. This needs to be added to the additional gross pay provided by the caseworker.
  • Select ‘Tools’ and then ‘Calculation Support’. Select the calculation type, in this case, directors, and select ‘OK’.
  • Enter name, NINO and reference.
  • Select the ‘Tax Year’ from the dropdown menu (use the beginning of the tax year, for example 2010-2011, select 2010).
  • If the director started part way through the year, select ‘Pro Rata’ in the ‘Earnings Periods options’ and enter the start date (if the director ceases part way through a year the pro rata calculation is not required).
  • Enter the total NI paid, employee NI paid, NI category letter, the new gross pay figure, and NI rebate if applicable.
  • Select [Calculate].
  • Select [Print].

Note: Before calculating the NICs as above, check that the earnings on which the director has paid NICs for all employments in the year have not reached that year’s Upper Earnings Limit (UEL).

If the UEL has not yet been reached, ensure that any calculation on extra earnings takes the UEL into account to ensure that an overpayment is not created.