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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1 NICs: Payments made under employment legislation: Re-allocating primary NICs paid on a payment made under a reinstatement order, a re-engagement order, an order for the continuation of a contract of employment or a protective award:

 Period to which payment relates falls wholly in two or more tax years other than the one in which the NICs werepaid

As explained in NIM07066, an employee who has paid NICs on apayment made under:

may request that those NICs are treated as paid in an earlier tax year to the one inwhich the NICs were actually paid if this will protect or enhance their benefit/pensionposition for the earlier year.

Where the period to which the payment relates falls wholly in two or more tax years otherthan the one in which the NICs were paid, the NICs may be treated as paid in proportionfor each of the tax years in which the period to which the payment relates falls.

Example

Employer J makes a payment under a protective award to an employee on 11 April 2001.NICs are paid on that date (ie in the 2001/02 tax year). The payment represents arrears ofpay for the period 1 March 2000 to 28 February 2001 (ie, the 1999/00 and 2000/01 taxyears).

As the period to which the payment relates – 1 March 2000 to 28 February 2001 –falls wholly in two or more tax years – 1999/00 and 2000/01 - other than the one inwhich the NICs were paid - 2001/02 - the NICs can, if the employee so requests, be treatedas paid proportionately for the 1999/00 and 2000/01 tax years.

For details on how to apportion the amount of NICs paid, see NIM07070.