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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: PAYE recovery and associated processes: special arrangements/schemes: regional NIC holiday employers

These are normal PAYE schemes where the employer has successfully registered for the Regional NIC Holiday Scheme. This scheme started on 6 September 2010 and is available to new businesses that start up during the period from 22 June 2010 to 5 September 2013. The only way to identify these cases is to check Employer Business Service (EBS) notes if you have access to this system.

Payments

Qualifying employers are entitled to deduct Class 1 NICs from in year PAYE payments due to HMRC.

NIC Holiday Team

The NIC Holiday team deals with the registrations, issuing and processing of NIC Holiday Annual Return (Form E92).

The address of the team is:

National Insurance Contributions & Employers Office
NIC Holiday Team
Room BP4102
Chillingham House
Benton Park View
Longbenton
Newcastle Upon Tyne
NE98 1ZZ.

End of Year Processing and Potential Underpayment Position on Record

Employers who are participating in the scheme still show the total Class 1 NIC due on their Employer Annual Return (P35 and forms P14). They account for the NIC deducted on the NIC Holiday Return Form E92 and list the employee’s details on Form E89 (or equivalent).

The NIC Holiday team issue and manually process the NIC Holiday return by making an adjustment on EBS. Therefore, each employer who has deducted Class 1 NIC due to the Holiday scheme will have a potential underpayment on BROCS for at least the value of the NIC withheld until the adjustment is made and a P228 AMD is received.

To address this and to allow sufficient time for the NIC Holiday team to process NIC Holiday Returns the issue of a DN1P underpayment notice is inhibited for employers who have been successfully registered for the scheme before 11 March. There is no automatic process to inhibit the DN1P underpayment for employers registered after this date.

Action on receipt of a P228 charge

When the P228 charge is received on BROCS and there is an underpayment the next course of action will either be:

  • New IDMS LAN immediately if any in-year PAYE months were subject to Local Action before the P228 charge was received or if any of the following conditions apply. This is to safeguard any collection activity DMB has taken for the in year debt:

    • Permanent Referred for Instruction case (PRFI)
    • Insolvent
    • Deceased
    • Welsh Language case
    • scheme is ceased
    • the collection numeral is proper to PD Collection
    • Simplified Q case
    • Direct Payment Scheme
    • Direct Collection Scheme
    • Electoral Payment Scheme
    • Taxed Award Scheme
    • Profit Sharing Scheme
    • Norwegian Protocol Case
    • DOE EPA 1978 Scheme
  • LAN deferred until 1 August and only issued if an underpayment remains at that date; or
  • DN1P if the employer registered after 11 March and no previous LAN issued.

DMB Campaigns

Please note that PAYE IDMS work items for these employers are not excluded from DMB Campaigns unless:

  • owned by specialist offices
  • Insolvency signal is set
  • Abroad signal is set
  • Welsh language signal is set
  • Deceased cases
  • Enforcement signal C, J, L or M is set.

Underpayment of PAYE on BROCS

Underpayment due to NIC Holiday deductions

If an employer advises that a PAYE/NIC underpayment is due to deductions made because of the NIC holiday scheme, establish if the underpaid sum covers the full amount deducted.

If it does not, obtain payment of the underpayment not attributable to the NIC Holiday.

NIC Holiday return not received

If an employer advises that they have registered for the scheme but have not received their NIC Holiday Return, tell the employer to phone the Employer Helpline on 0300 200 3200.

NIC Holiday return not filed

If an employer advises that they have registered for the scheme but have not sent their NIC Holiday Return in, tell them to send their completed return (E92 & E89(s) or equivalent) to the NIC Holiday team at Longbenton immediately otherwise recovery action will continue.

All scenarios

In all scenarios noted above:

  • B/F the case on IDMS as “Dispute Review” until 1 August
  • add an appropriate IDMS note
  • continue with recovery action for any amounts/returns outstanding.

If after 1 August:

  • an employer advises that they have sent their NIC Holiday Return but it is not reflected on BROCS:

    • if you have access to EBS, check EBS notes to see if the Holiday Return has been received but there is a reason for it not being processed
    • tell the employer to phone Employer Helpline on 0300 200 3200 to resolve
    • B/F the case on IDMS as “Dispute Review” for 14 days
    • add an appropriate IDMS note
    • continue with recovery action for any amounts outstanding.
  • employer advises that they have sent their NIC Holiday Return without E89(s) (or equivalent) details:

    • tell the employer that the return cannot be processed without the employee details and that they must send E89(s) or equivalent to the NIC Holiday team immediately otherwise recovery action will continue
    • B/F the case on IDMS as “Dispute Review” for 14 days
    • add an appropriate IDMS note
    • continue with recovery action for any amounts/returns outstanding.

When enforcement proceedings is the next course of action against an NIC Holiday employer who has not submitted the full NIC Holiday return, that is the E92 and E89 (or equivalent), you should take action to recover the full outstanding debt.