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HMRC internal manual

National Insurance Manual

NIM06140 - Class 1 NICs : Expenses and allowances : Relocation allowances : Employees who have not paid NICs on relocation expenses paid prior to 6 April 1998

As explained in NIM06115 legal advice indicated in 1997 thatrelocation allowances are earnings for NICs purposes and that NICs should have been paidsince 6 April 1975.

The misinterpretation of the law will mean that some people who received relocationallowances before 1998 but did not pay NICs on them may have missed out on contributorybenefit entitlement. If the allowances had been included in earnings they might have beenliable to pay primary NICs on them and the extra primary NICs might have made thedifference between qualifying for benefit or additional amounts of benefit.

On 16 March 1998 a Press Release was issued by the then Contributions Agency invitingindividuals who thought they might have been adversely affected to contact the Agency foradvice. If a contact is made you must take action to investigate the position and deemcontributions as appropriate. (Contact Cross-Cutting Policy for guidance on deeming ofcontributions.) NICs should be posted as employee-only contributions and treated astimeously paid.

You will need to handle any queries which are received with discretion. You should resolvethem as best you can on the basis of the facts and information provided by the individualand supported by whatever evidence is available (payslips, for example). Generally, do notcontact the employer or former employer except as a last resort and only then if it isreasonable to do so.

It would be reasonable to contact a person’s current employer, especially if theallowances were paid in recent years. It would not be reasonable to contact a formeremployer about allowances paid in 1976/77.