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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

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Notices of decision: Wording of National Insurance contributions liability decisions: Calculating unpaid Class 1 National Insurance contributions due on earnings above the upper earnings limit

DANSP30700 provides some general information which applies to Class 1 National Insurance contributions (NIC) liability decisions.

For tax years before 2003/04, if the primary NIC paid in one employment are equivalent to the primary NIC due on earnings up to the upper earnings limit (UEL), only secondary NIC will be due on earnings above the UEL. For tax years from 2003/04, as well as primary NIC due on earnings up to the UEL, primary NIC are due at 1 per cent on all earnings above the UEL.

It is not always possible to determine from an end of year return (P14) whether for each earnings period covered by the decision, the earner has paid primary NIC on earnings up to the UEL. Where you are unsure but think it is likely that the earner has paid primary NIC on earnings up to the UEL in every earnings period covered by the decision, ask the employer to confirm this and note your papers.

Where the dispute involves earnings paid to an earner which are all earnings above the UEL calculate

  • any secondary NIC due by multiplying the earnings on which no NIC have been paid by the appropriate secondary NIC percentage rate, and
  • for tax years from 2003/04, multiply the earnings on which no NIC have been paid by 1 per cent for primary NIC due on earnings above the UEL.

Once you have calculated the additional NIC due add this to any NIC already paid in the tax year, if there is nothing to suggest that the NIC already paid are incorrect.

DANSP31100 provides an example to illustrate the above.