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HMRC internal manual

# Class 1: calculating & recording earnings, NICs & NIC rebates: rates, limits, thresholds, Rebates and P11 completion: 2003/04 completion of forms P1 1(2003-04) & P14 (2003-04) example 13 - contracted-out money purchase (comp) 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 1% = £0.09 Total NIC rebate due = £0.14 + £0.09 = £0.23

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 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 £0.23 £0.00

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

 1a 1b 1c 1d 1e £4004 £468 R £11.96 £0.00