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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

Notices of decision: Covering letter: Named persons

DANSP43100 explains when you should issue a covering letter with a notice of decision. Where the wording of a decision names a person affected by the decision, other than the person the decision is addressed to, they will also require a covering letter.

It is not sufficient to send a DAA1(B) with a covering letter simply telling the named person that a notice of decision is enclosed. You must explain why the decision has been issued.

The content of the covering letter depends upon the degree of involvement that a person named in the decision has had in the dispute. A letter sent to a named employee, where the correspondence has been with the employer, may be brief but give enough information about the decision to enable the employee to challenge it if they wish. Always tailor the content of the covering letter to the circumstances.


Class 1 NIC liability decisions are sent to an employer and each of the affected employees named in the decision. The decisions were issued because the employees have two jobs with the same employer and the employer has failed to aggregate the two amounts of earnings when calculating Class 1 National Insurance contributions (NIC). HMRC considers that the earnings should have been aggregated. HMRC has not involved any of the employees named in the decision in any correspondence on this matter before the decision is to be issued.

You should send a covering letter to each named employee telling them

* why more Class 1 NIC are due than they have paid,
* they will not be asked for arrears of Class 1 NIC if you know that they are properly collectable from the secondary contributor, which is usually the employer.

Do not tell each employee

  * any details of other employees affected by the decision,
  * the total amount of NIC HMRC intends collecting from the employer in respect of all affected employees.

Where a decision includes a representative sample of employees but will affect more employees, consider sending a covering letter to the employer that the employer can issue to all affected employees, including those not named in the decision.

Data security and confidentiality

You must pay regard to data security and confidentiality issues when drafting any letters for issue to those named in the decisions. When sending covering letters to those named in the decision, be careful not to divulge information about the other party that is not in the public domain. HMRC’s Information Disclosure Guide makes you aware of how important it is to keep personal customer information confidential, and provides advice on issues in this area.