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HMRC internal manual

Employment Status Manual

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HM Revenue & Customs
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Procedural aspects of status cases: formal procedure in disputed cases - Regulation 86 of the SS (Contributions) Regulations 2001 (SI 2001 No. 1004)

For information

Where a Section 8 ‘employed earner’ decision has been made, you should be aware that the secondary contributor - usually the employer - is liable in the first instance to pay also any primary Class 1 NICs that are due. This is provided for by paragraph 3(1) of Schedule 1 to the SS Contributions & Benefit Act 1992. But in certain circumstances this provision does not apply.

For instance, Regulation 86(1)(a) of SI 2001 No. 1004 provides that:

  • where there has been a failure to pay primary Class 1 NICs which the secondary contributor is liable to pay on behalf of the employee, and
  • that failure is due to an act or default of the employee and not to any negligence on the part of the secondary contributor,

then the provisions of paragraph 3(1) of Schedule 1 do not apply. In other words, the employee becomes responsible for paying the unpaid primary Class 1 NICs.

This regulation, however, applies to Class 1 NICs recovery issues in general and because of the conditions outlined above it will be rarely used in status matters.