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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
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Class 1: calculating & recording earnings, NICs & NIC rebates: rates, limits, thresholds, rebates and P11 completion: 2003/04 completion of forms P11 (2003-04) & P14 (2003-04) example 8 - contracted-out salary related (COSR) scheme -

  • Lower Earnings Limit (LEL): £77.00
  • Earnings (ET): £89.00
  • Upper Earnings Limit (UEL): £595.00

Weekly earnings of £86.00

Employee’s NICs due = NIL      
         
Employer’s NICs due = NIL      
£86.00 - £77.00 = £9.00      
Employee’s NIC rebate due = £9.00 x 1.6% = £0.144, rounded to £0.14  
Employer’s NIC rebate due = £9.00 x 3.5% = £0.315, rounded to £0.31  
Total NIC rebate due = £0.14 + £0.31 = £0.45  

Note

As there are no employee’s NICs due to set-off against the employee’s NIC rebate, the full value of the employee’s NIC rebate is available to the employer, in addition to the value of the employer’s own NIC rebate.

Because there are no employer’s NICs due, the effect of setting-off the employee’s and employer’s NIC rebates due is that the total (employee’s and employer’s) NICs payable is a minus amount. The column 1d entry on the P11 is therefore marked ‘R’.

Complete P11 as follows -

1a 1b 1c 1d 1e  
           
£77 £9   R £0.45 £0.00  
           

Assuming earnings are the same for 52 weeks, complete P14 as follows -

1a 1b 1c 1d 1e  
           
£4004 £468   R £23.40 £0.00