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HMRC internal manual

National Insurance Manual

Earnings periods: notifications issued in accordance with regulation 3(2B), SS(C)R 2001: dispute as to whether a notification is appropriate


An employer or employee may dispute that a notification is appropriate if the pay practice is not one in which most of the earnings are paid at the longer of two or more intervals. The dispute may arise as a result of issuing the letter of intention or once the decision has been issued. If new facts about the pay practice come to light, consider what has been said and decide whether the issue of a notification under regulation 3(2) is still appropriate.

In considering any dispute it should be noted that a regulation 3(2B) direction does not imply any motive on the part of the employer to deliberately reduce the contribution liability. Rather it deals with a clearly stated set of facts. That is, that a person is paid regularly at two different intervals with the greatest part of the earnings being received at the longer pay interval.

Although regulation 3(2B) requires certain facts to be present, it does not mean that a direction to change the earnings period has to be issued. The regulation provides that an officer of the Board ‘may’ decide to issue a direction and this affords a degree of discretion. Such discretion is entirely a matter for the investigating officer, though advice on the appropriateness of issuing a direction can be sought from the NICs Technical Support Manager.

Dispute received after letter of intention issued

If the employer or employee responds to the letter of intention and after considering the dispute it is felt that a notification is still appropriate continue action as in NIM09514, “Issuing of Decision et seq.

If a notification is considered no longer appropriate, send the employer and employee a letter to tell them that a notification will no longer be issued.

Dispute received after a decision has been issued.

If the dispute is received in response to the issue of the decision treat it as an appeal and consider whether the appeal can be settled by varying the decision. If it is decided that an original decision was wrong and a notification to change the earnings period was not appropriate, the variation should provide that the direction is revoked from the date it was issued. If the dispute cannot be resolved the appeal will need to proceed as outlined in the Decisions and Appeals Guide.