Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: PAYE RTI: submissions and charges: class 1A NIC

Class 1A NIC

Since April 2013 ETMP has been able to account for class 1A NIC liabilities and payments.

ETMP can also issue P11D (b) returns and payslips and, where appropriate, a reminder letter advising the employer that the return must be submitted by 6 July following the end of the tax year.

Accounting for class 1A NIC 2012-13

The 2012-13 class 1A NIC liabilities and payments are recorded on either:

  • ETMP, if the employer joined RTI during 2012-13
  • BROCS, for all other employers.

Accounting for class 1A NIC 2013-14 and subsequent years

All class 1A charges and payments for 2013-14 and subsequent years are accounted for on ETMP.

Interface with Employer Compliance System (ECS)

To enable ETMP to handle class 1A NIC, a new interface between ECS and ETMP was created.

When ECS is advised that an employer is potentially liable for class 1A NIC, ECS sends a class 1A NIC signal to ETMP. ECS also sends ETMP details of the class 1A NIC due when a P11D (b) return is captured.

New class 1A NIC tab

When ETMP receives a class 1A signal from ECS, the ‘Class 1A NIC Signal’ tab in the taxpayer overview on ETMP is populated with the details.

The class 1A NIC Signal tab displays the P11D (b)’s:

  • signal status
  • signal date
  • issue date
  • reminder date
  • return logged date
  • charge received date.

Issue of P11D (b) returns, payslips and reminder letters

The 2012-13 P11D(b) returns, payslips and so on are issued either by ETMP or BROCS depending on when/if the employer joins RTI by:

  • ETMP, if the employers joined RTI during 2012-13
  • BROCS, for all other employers.

For 2013-14 and subsequent years all output will be handled by ETMP.

For employer records where the class 1A NIC signal has been set by ECS, ETMP issues either:

  • a paper P11D(b) return and a P30B(CL1A) letter and payslip
  • an electronic version of the P11D (b) and P30B(CL1A Inter) payslip, if the employer is expected to file electronically.

This is undertaken in bulk in April each year.

During June, ETMP reviews employer records and if the return has not been received, issues a reminder letter.

Recording class 1A NIC charges on ETMP

When the P11D (b) is processed, ECS sends the return details to ETMP. ETMP captures the return logged date and charge received date on the class 1A NIC tab and posts the ‘Class 1A NICs Charge’ to the PAYE contract account.

Processing class 1A NIC payments

Class 1A NIC payslips show the employer’s AO reference together with the year and month 13. If the class 1A charge was for 2013-14 the payslip would show the reference number as “123 PA 00123456 1413” where:

  • 123 PA 00123456 is the Accounts Office reference
  • 1413 is the tax year month 13.

This means that class 1A NIC payments can be identified and posted against the correct charge.

If a payment is identified as relating to class 1A NIC but no class 1A NIC charge exists, the payment is automatically ‘locked’. This stops the payment being allocated to any non-class 1A NIC debt. Once the class 1A NIC charge is received, the locked payment is then allocated to the class 1A NIC charge.

Class 1A NIC penalties

ECS continues to raise class 1A NIC penalties, but from 2013-14 all new class 1A NIC penalties created are accounted for in the PAYE contract account rather than in the AMC contract account.

Class 1A NIC underpayment

IDMS creates a CL1A Underpayment work item where a P11D (b) return has been received and the resulting charge is underpaid or no payment has been received.

The work item shows the underpayment in the NIC field. You can see this information on the View Work Item screen.

The reference for a CL1A Underpayment work item is made up of a reference number and ASN like “123 P 1234567 YYYYCL MM” where:

  • 123 P 1234567 is the BROCS PAYE reference
  • YYYY is the tax year
  • CL represents CL1A
  • MM is the monthly instalment 13.

The CL1A work items are treated as separate work items and do not automatically link to any other work item types.

Note: In order for ETMP to recognise that payments made are for the CL1A charge, the monthly instalment is shown as month 13. The charge is still due and payable on 19 July (month 3). CL1A charges are interest bearing.