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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 to negligence on the part of the employee, it may be that liability for payment of those contributions can be transferred from the employer to the employee.

The above legislation allows for the transfer of the unpaid primary NICs liability to the employee 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 a front line manager of the Board that the earner knew that the secondary contributor had 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 the full outstanding primary NICs liability. You should provide the employee with a full breakdown of all unpaid primary NICs and request full payment of the total outstanding amount. 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 regulation 86, normal enforcement procedures should be followed to recover the unpaid primary contributions.