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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 structural overview: when employees become responsible for paying their own primary NICs

Regulation 86, Social Security (Contributions) Regulations 2001

Under the provisions of paragraph 3(1) of Schedule 1 to the Social Security Contributions and Benefits Act 1992, the employer is liable to pay both primary and secondary Class 1 NICs to the Inland Revenue. There are certain circumstances, however, where these provisions do not apply.

Regulation 86(1)(a) 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, or
  • the earner knows that the secondary contributor has wilfully failed to pay the primary contribution and has not recovered that primary contribution from the earner

then the provisions of paragraph 3(1) to the Act do not apply. This means

  • the employer is not liable to pay the unpaid contribution, and
  • the employee becomes responsible for paying the unpaid primary contributions.

For a definition of negligence see NIM12116.