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HMRC internal manual

National Insurance Manual

Class 1 NICs: interest: corrections on later returns

Paragraphs 10 and 11 of Schedule 4 to the Social Security (Contributions) Regulations (SSCR) 2001 provide that an RTI employer must pay the amounts of earnings related contributions which were required to be reported on a return under paragraph 21A or 21D Schedule 4 SSCR 2001 for a tax month or quarter within 14 or 17 days of the end of the tax month or quarter.

Where an RTI employer has made a mistake on a return under paragraph 21A or 21D, paragraph 21E Schedule 4 SSCR 2001 provides a statutory mechanism for the employer to correct the mistake. How the employer does this, depends on when they become aware of the inaccuracy. If this is:

  • before 20 April following the end of the tax year, they must make the correction by providing the correct information on their next Full Payment Submission (FPS) (or an additional FPS if correcting after they have submitted their final FPS)
  • on or after 20 April following the end of the tax year, they must make the correction on an Earlier Year Update (EYU) instead of an (FPS).

In-year corrections on a later or additional FPS

Where a RTI employer makes an in-year correction on an FPS before 20 April, paragraph 10(3A) or 11(3A) Schedule 4 SSCR 2001 provide that the amount payable as specified in paragraph 10(2) and 11(2) is adjusted to take account of the correction.

  • If the value of the adjustment is a positive amount (ie: additional NICs are payable) those Class 1 NICs are due and payable 14/17 days after the end of the tax month or quarter in which the correction is made. HMRC will calculate late payment interest from this date.
  • If the value of the adjustment is a negative amount (ie: there is an overpayment of NICs) paragraphs 10(4) and 11(3B) of Schedule 4 SSCR 2001 (as inserted by The Social Security (Contributions) (Amendment No. 3) Regulation 2 2014 / Statutory Instruments 2014 No. 1016) provide that the overpaid amount is treated as having been paid to HMRC 14/17 days after the end of the tax month or quarter in which the correction was made. Repayment interest will be calculated from this date.

Earlier year corrections on an EYU

Where a RTI employer makes a correction on an EYU on or after 20 April, paragraph 11ZA Schedule 4 SSCR 2001 provides that the amount specified in paragraph 10(2) and 11(2) for the final tax period the return relates, is adjusted to take account of the information on the return (EYU).

  • If the value of the adjustment is a positive amount (ie: additional NICs are payable) those Class 1 NICs are treated as being due and payable 14/17 days after the end of the final tax period for the year the return relates and late payment interest is calculated from this date.

If the value of the adjustment is a negative amount (ie: there is an overpayment of NICs) paragraph 11ZA(3A) (as inserted by The Social Security (Contributions) (Amendment No. 3) Regulation 2 2014 / Statutory Instruments 2014 No. 1016) provides that the overpaid amount is treated as having been paid to HMRC 14/17 days after the end of the final tax period in the year covered by the return. Repayment interest will be calculated from 19/22 April following the end of the tax year.