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HMRC internal manual

National Insurance Manual

Earnings periods: notifications issued in accordance with regulation 3(2B), SS(C)R 2001: action by network: investigation

Cases where a notification under regulation 3(2B) may be appropriate can come to light either:

  • as a result of compliance activity
  • as a result of the earner or secondary contributor contacting the Department.

Where it appears that a pay practice exists under which most of the earnings are paid at the longer interval take the following action:

  • identify all employees who get most of their earnings at the longer of two or more intervals. Get details of the employees’ home addresses in order to tell them if, and when, a notification is to be issued
  • obtain sufficient information to identify that the pattern of payments is an established one and one that is likely to continue. Regulation 3(2A) requires the Department to be satisfied that most of the earnings are normally paid at the longer interval and that the practice is likely to continue. Full details of the amounts paid and the intervals of payment for the last 3 years should establish a pattern but, if this information is not available, eg because an individual has not been employed for 3 years, get the information that is available
  • consider whether, in light of the amounts involved, a direction is appropriate. If it is, tell the employer:

    • that based on the information obtained a change to the earnings period is considered appropriate
    • what this change would be
    • how contributions would be calculated
    • that the facts will be reported
    • that they and the employee/s involved will receive a letter explaining that the Department intends to change the earnings period from a date to be specified
    • that if they do not think a change is appropriate, they will have 30 days in which to say why
    • that after the 30 day period a decision will be issued which will allow either the employer or the employee to appeal.

Prepare a report and refer in a file to the ECTM

Action by Band C Manager

The report should enable the Band C Manager, in consultation with the TSM, to confirm that a notification under Regulation 3(2B) is appropriate. A notification only applies to future earnings so the Manager will decide whether to issue it with effect from an immediate date or the beginning of the next tax year. To reach this decision the Manager will consider account payments already made and likely to be made - see NIM09511.