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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
, see all updates

Class 1: Deeming: Definition -

Deeming is a purely administrative action and refers to Class 1 NICs that you aresatisfied IR has received. This means that

  • NICs have been deducted from the employee; and
  • NICs have been paid across to IR; but
  • you have not been able to trace the relevant return and allocate it to the NI account.

If you can establish that the NICs were paid to IR, it follows that those NICs shouldbe accepted as paid in full and should carry all the rights of a fully paid contribution.The status of deemed NICs is covered in NIM12105.

The reason you must record the NICs to the NI account as deemed, rather than just as paid,is to prevent a refund being triggered if the “real contributions” reach the NIaccount at a later date.

When you deem Class 1 NICs, you are accepting that those NICs have been paid and aresomewhere within the IR systems. There is therefore the possibility that at some point inthe future they will be matched up and recorded to the individual’s NI account. Ifthis happens, the account will then appear to show a duplicate payment and it would seemthat a refund should be given. Recording the NICs as deemed serves as a means ofidentifying the fact that they have not really been paid twice, and of preventing such arefund being made.