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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: Persons named in Class 1A National Insurance contributions liability decisions

DANSP30700 explains the general principles to apply when wording liability decisions.

Class 1A National Insurance contributions (NIC) liability decisions should always be sent to the person liable to pay the NIC, see NIM13101 for information about the liable contributor. In most Class 1A cases this is the employer but it can be another person prescribed as the secondary contributor or the third party who provided the benefits or non-cash vouchers.

DANSP41100 explains that a decision is issued to all persons named in a decision. Wherever possible, earners should be named in Class 1A NIC liability decisions, because

  • Class 1A NICs are due on the amount of general earnings chargeable to income tax. That income tax is payable by the earner not the person liable to pay the NICs.
  • The outcome of any appeal against a Class 1A NIC liability decision may result in Class 1 NIC liability which may affect an earner’s entitlement to contributory benefits. For example, HMRC consider that Class 1A NICs are due on non-cash vouchers provided by a third party but the third party asserts they are not liable to pay Class 1A NICs. If their appeal is successful Class 1 NICs will be due from the secondary contributor, the employee’s employer.

In such cases send the named person a DAA1(B) and a covering letter, see DANSP43200.

See

  • DANSP41200 about cases where it is not possible to name all affected persons,
  • DANSP41500 where more than six employees are affected.

For an example of a Class 1A decision see DANSP32000.