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HMRC internal manual

Decisions and appeals for National Insurance Contributions and Statutory Payments

Appeals: Settling appeals by agreement: National Insurance contributions paid to settle appeal

Regulation 11 of the Social Security Contributions (Decisions and Appeals) Regulations 1999 (SI 1999 No 1027); regulation 52 of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)

Where a person pays National Insurance contributions (NIC) to settle an appeal and at some later date it is established that those NIC were paid in error, providing the conditions in regulation 52 of the Social Security (Contributions) Regulations 2001 are satisfied, the NIC paid in error may be repaid. See NIM37000 about refunding NIC.

In cases where appellants are unwilling to settle appeals unless HMRC tells them that at some later date if it is established that those NIC were paid in error they will be entitled to apply for a refund of the NIC paid in error, include the following wording in a letter. Do not change any of the wording of this letter apart from the parts where you are asked to insert information.

Assuming

* you paid Class [insert Class of NIC] National Insurance contributions (NIC) we consider are due to settle the appeals by agreement under regulation 11 of the Social Security Contributions (Decisions and Appeals) Regulations 1999 (SI 1999 No 1027), and
* HMRC accepts at some later date that the NIC were not due, for example, a decision was made final by the Courts that NIC were not due in a case indistinguishable from yours, and
* you could demonstrate that our initial decision was incorrect, and
* you apply for the NIC paid in error to be returned within the statutory time limits, see regulation 52(8) of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004) (‘the 2001 Regulations’),
  
HMRC will refund the NIC paid in error and any interest paid on those NIC. The amount repaid will be calculated under regulation 57 of the 2001 Regulations.
  
Interest is also paid on repaid Class 1 NIC/Class 1A NIC/Class 1B NIC [delete whichever does not apply] paid by you in error under provisions in regulation 77 [delete if Class 1 or Class 1B NIC]/paragraph 18 of Schedule 4 [delete if Class 1A NIC] to the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004). [Omit final paragraph if
  
  * neither Class 1, Class 1A or Class 1B are not paid, or
  * the case involves primary Class 1 NIC liability only].