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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

Co-ordinating action on National Insurance contributions decisions and income tax determinations or assessments: Introduction

Where a National Insurance contributions (NIC) dispute can only be progressed by issuing an appealable decision, to give those named in the decision a right of appeal, consider whether there are any income tax implications.

As a general rule, where both NIC and income tax are due, decision makers should raise an income tax determination or assessment at the same time as a NIC decision. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Appeals against NIC and income tax decisions must be processed and litigated together.

Example 1

Local Compliance identify that an employer has not included certain payments in gross pay for Class 1 NIC and PAYE income tax. The payments have been returned on forms P11D. Local Compliance issue PAYE income tax determinations under regulation 80 of the Income Tax (Pay As You Earn) Regulations 2003 at the same time as NIC decisions.

The employer appeals to HMRC against both the income tax determinations and the NIC decisions but does not ask for a review. The appeals should be worked together.

Example 2

Large Business Service (LBS) identify that an employer provides company cars to several hundred employees. The employer asserts that Class 1A NIC are not due on the fuel benefit because the employer considers that the employees make good the fuel used for private travel. LBS disagrees and asserts that the employer has completed forms P11D(b) (the Class 1A NIC return) and the P11Ds for all affected employees incorrectly. The employer wants a decision to appeal so the matter can be determined by the tribunal.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)