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HMRC internal manual

National Insurance Manual

Class 1: calculating & recording earnings, NICs & NIC rebates: rates, limits, thresholds, rebates and P11 completion: for 2003/04 background - changes to forms P11 and P14

From 6 April 2003, there are a number of changes to forms P11 Deductions Working Sheet and form P14 End of Year Summary. The need for these changes was driven by:

  • the introduction of Statutory Paternity Pay (SPP) and Statutory Adoption Pay (SAP); and
  • changes in the way NICs and NIC rebates are recorded.

As well as having to record and report details of SPP and SAP paid, with effect from 6 April 2003 employers are required to calculate, record and report employee’s NICs payable at 1% (see NIM01110) on all earnings in excess of the UEL. This is in addition to the employee’s NICs payable at the main percentage rate on earnings between the Primary Threshold (see NIM01008) and UEL.

Furthermore, employers are no longer required to record and report separately details of NIC rebates. Employers will still have to calculate NIC rebates, where appropriate. However, the NIC rebate amounts will be deducted from the NICs due and the employer will record and report the balance of NICs payable, if any, after deduction.

This may lead, occasionally, to a minus amount being recorded on the P11(2003-04) and reported at year-end on the P14(2003-04). This will occur where contracted-out earnings are at or below the ET but may also occur where earnings just exceed the ET (around £93 per week for COSR schemes and £90 per week for COMP schemes). Both forms have been amended to cater for this change.

Copies of forms P11(2003-04) and P14(2003-04) can be found at NIMAppendix8 and NIMAppendix9 respectively.

Guidance on how to identify forms P11(2003-04) and P14(2003-04) can be found at NIM11031.

A detailed explanation of how each P11(2003-04) column for earnings and NICs should be completed can be found at NIM11032 and NIM11033.

NIM11034 onwards provides examples of how to calculate, record and report earnings and NICs.