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HMRC internal manual

National Insurance Manual

Class 1: Deeming and treating as paid: Introduction -

NIM01001 provides general information on liability to payClass 1 NICs.

Where such liability arises, Class 1 NICs should be paid to IR and recorded to theindividual employee’s NI account.

However, you will deal with cases where, despite there being a Class 1 liability, no NICsare recorded on the NI account. Where this is the case, it may be possible to record themissing primary Class 1 NICs as either deemed or treated as paid.

There is an important distinction between the terms “deemed” and “treatedas paid”. The two methods of recording NICs have different consequences for theemployee.

See NIM12103 for a definition of deeming NICs.

See NIM12111 for a definition of treating NICs as paid.

Before you can consider recording Class 1 NICs as deemed or treated as paid however, youwill need to establish

  • why the NICs are missing from the NI account;
  • whether the NICs have been paid to IR.

Full action to try to trace and post the missing NICs must therefore be taken in allcases. A decision on whether NICs can be deemed or treated as paid must only be made whenthe missing NICs cannot be found and allocated to the NI account.