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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Alternative rights of recovery (PAYE directions): primary class 1 NICs: background: ‘deeming’ and ‘treating as paid’

Where liability arises the Class 1 NICs should be paid to HMRC and recorded to the individual employee’s NI account. It is possible that despite there being Class 1 liability no NICs are recorded. Where this occurs it is possible to record the missing primary Class 1 NICs as either ‘deemed’ or ‘treated as paid’.


This is purely an administrative action and refers to Class 1 NICs that you are satisfied have been paid. This means that

  • NICs were deducted from the employee, and
  • NICs have been paid, but
  • the contributions have not been allocated to the individual’s NI account.

The purpose of ‘deeming’ primary Class 1 NICs is that there is an acceptance that the NICs have been paid and if at some future point the NICs are allocated to the individual’s NI account it will avoid a duplicate payment being posted and a potential refund arising.

Treating as paid

Treating as paid is a legislative term under Regulation 60 SSCR 2001. It allows for unpaid primary Class 1 NICs that were payable on a contributor’s behalf by a secondary contributor to ‘be treated as paid’, but only for the purposes of entitlement to contributory benefit.

Unpaid primary Class 1 NICs can only be treated as paid provided the failure was not

  • with the consent or connivance of the employee
  • attributable to any negligence on the part of the employee.

Cases under review by Specialist Employer Compliance for unpaid primary Class 1 NICs will only be considered where it can be established that negligence by the employee had taken place and primary Class 1 NICs cannot be ‘treated as paid’. This is covered at COG932480.