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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

HM Revenue & Customs
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Recording underpayments of National Insurance contributions in National Insurance Contributions Office

Class 1 National Insurance contributions underpaid

In a case handled by the National Insurance Contributions Office (NICO), which involves unpaid or underpaid Class 1 National Insurance contributions (NIC), NICO note the underpayment in NPS (formerly called NIRS2) Financial Transaction Handling (FTH) screens.

Where a person disputes they owe the Class 1 NIC and that dispute can only be resolved by issuing a decision that carries a right of appeal, NPS Work Management should be noted when a decision is issued and if an appeal is made.

If an appeal is made, no action should be taken to recover NIC until the outcome of the appeal is known. Once the appeal is settled, withdrawn or determined by a tribunal and or the Courts

  • note NPS Work Management of the outcome of the appeal, and
  • where the amount due is amended, note NPS FTH screens of the amended amount,
  • if some NIC are due continue normal action to request and recover payment.

Class 2 NIC unpaid

In cases where Class 2 NIC are unpaid, if NPS is aware that the person is self-employed bills will be issued by NPS automatically. If a dispute about liability cannot be resolved without issuing a decision that gives the person a right of appeal, use the management inhibition function in the NPS FTH to inhibit the issue of bills until the appeal is settled, withdrawn or determined by a tribunal and or the Courts. If Class 2 NIC are confirmed as due ensure that any management inhibition is removed so that bills can be issued.