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HMRC internal manual

National Insurance Manual

Class 1: Treating as paid: Negligence established: Transfer of primary liability to employee -

Regulation 86, Social Security (Contributions) Regulations 2001

Where you have established that a failure to pay unpaid primary Class 1 NICs was due tonegligence on the part of the employee, it may be that liability for payment of thosecontributions can be transferred from the employer to the employee.

The above legislation allows for the transfer of the unpaid primary NICs liability to theemployee where

  • the failure to pay was due to an act or default of the earner and not to any negligence on the part of the secondary contributor; or
  • it is shown to the satisfaction of an officer of the Board that the earner knows that the secondary contributor has wilfully failed to pay the primary contribution and has not recovered that primary contribution from the earner.

This provision should therefore be used where appropriate to bill the employee for thefull outstanding primary NICs liability. You should provide the employee with a fullbreakdown of all unpaid primary NICs and request full payment of the total outstandingamount. You should also provide the employee with leaflet CA07 (National Insurance –Unpaid and late paid contributions).

Where liability has been transferred to the employee under the provisions of regulation86, normal enforcement procedures should be followed to recover the unpaid primarycontributions.