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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

Notices of decision: Wording of penalties’ decisions

Most penalty notices are issued automatically when returns are not submitted. The decisions are appealable. In such cases form DAA1 is not used, the penalty notice tells the recipient they have a right of appeal against the penalty.

The Statutory Payments Dispute Team in Complaints Appeals and Statutory Payments in the National Insurance Contributions Office or Local Compliance complete form 394(SP) available through SEES, see SPM90000.

Local Compliance, Large Business Service, Specialist Investigations or Charities Assets and Residence may discover that an employer has either completed a return incorrectly or has failed to make a return, for example, where there are earnings on which National Insurance contributions (NIC) are due which were not included on forms P14 (End of Year Returns). In such cases, if they cannot reach a settlement with the employer they are required to issue form 394(IT/CT), a penalty determination. The determination is an appealable decision. In such cases do not use form DAA1.

Form 394 (IT/CT) is available through SEES. The form is generated automatically once you have completed some identify details, reference details, details about the unpaid NIC and the amount of the penalty. You do not have to construct the wording of a decision.