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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1 structural overview from 6 April 2003 to 5 April 2009: changes to the excess refund process from 6 April 2003

NPS will continue to inform Payment Reconciliation at NIC&EO of:

  • any primary Class 1 NICs paid in excess of a person’s annual maximum
  • and any Class 1 and Class 2 NICs paid in excess of a person’s annual maximum.

This automated process is still subject to a deminimis level of half the relevant year’s Lower Earnings Limit.

Although the introduction of an uncapped primary Class 1 liability on all earnings above the Upper Earnings Limit means that each contributor will have an individual maximum based on the level of their earnings, it will continue to be possible for a person to pay in excess of their prescribed maximum.

This is because where a person fails to apply for deferment (see NIM01180) they will pay Class 1 NICs:

  • at the main primary percentage (11% for 2003 to 2004) on all earnings above the Primary Threshold, up to and including the Upper Earnings Limit in each employment
  • at the additional primary percentage (1% for 2003 to 2004) on all earnings above the Upper Earnings Limit in each employment.

Where this occurs, NPS will continue to identify excess payments and refer cases to Payment Reconciliation at NIC&EO who will take any necessary action to invite a claim and refund the excess payment.

Any enquiries about potential refunds should be referred to Payment Reconciliation at NIC&EO.