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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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NIM07001 - Class 1 NICs: Payments made under employment legislation: Introduction

Employment Rights Act 1996

Trade Union and Labour Relations (Consolidation) Act 1992

Social Security Contributions & Benefits Act 1992

Social Security (Contributions) (Employment Protection) Regulations 1977

Employers required to make certain payments

Under the above employment legislation, an employer is required, in certaincircumstances, to make to an employee the following payments:

  • Guarantee payments
  • Medical suspension payments
  • Maternity suspension payments
  • Pay arrears under a reinstatement order
  • Pay arrears under a re-engagement order
  • Pay under an order for the continuation of a contract of employment
  • Protective awards

Under the above social security legislation, the above payments are, for NICs purposes,either:

  • earnings; or
  • deemed to be earnings.

Guidance on what the payments are and their NICs treatment is set out as follows:

  • Guarantee payments - NIM07005 – NIM07006
  • Medical suspension payments - NIM07010 – NIM07011
  • Maternity suspension payments - NIM07015 – NIM07016
  • Pay arrears under a reinstatement order - NIM07020 – NIM07021
  • Pay arrears under a re-engagement order - NIM07030 – NIM07031
  • Pay under an order for the continuation of a contract of employment - NIM07040 onwards
  • Protective awards - NIM07050 onwards

And in relation to:

  • Pay arrears under a reinstatement order - NIM07020 – NIM07021
  • Pay arrears under a re-engagement order - NIM07030 – NIM07031
  • Pay under an order for the continuation of a contract of employment - NIM07040 onwards
  • Protective awards - NIM07050 onwards

there is also guidance on the following related issues:

  • the earnings period to be used in assessing NICs liability - NIM07060 onwards
  • re-allocating primary NICs - NIM07066 onwards

Payments of earnings out of the National Insurance Fund where the employer isinsolvent

Where an employer is insolvent the Secretary of State for Trade and Industry can maketo an employee certain payments out of the National Insurance Fund. Guidance on this issuecan be found at NIM07081 onwards as follows:

  • general – NIM07081
  • what can be paid out of the National Insurance Fund - NIM07082
  • limit on the amount that can be paid out of the National Insurance Fund to an employee foe any week - NIM07083
  • what is and is not earnings for NICs purposes - NIM07084
  • the earnings period to be used in assessing NICs liability - NIM07085.