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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Calculating Class 1A NICs: Establishing whether a fully matching deduction is available: Evidence

The most common evidence produced by employers will be documentary evidence. Items such as

  • invoices
  • receipts
  • diaries showing business engagements/appointments
  • representative samples of the costs involved.

Oral evidence can also be taken into account in identifying whether a fully matching deduction is available.

In dealing with any deduction a reasonable approach should be applied, exercising a degree of judgement where there is no documentary evidence available and oral evidence has to be obtained.

Every employer, when requested to do so by an officer authorised by HMRC, is required, by paragraph 26 of Schedule 4 to the SS(C)R 2001, to produce documents and records of any kind or description relating to the amount of any Class 1A NICs payable by the employer. You can find more guidance about powers in the Compliance Operational Guidance (COG) manual.

An employer’s obligation to keep sufficient records about benefits to support a reduction in his Class 1A NICs calculation is the same as that imposed upon him for keeping equivalent expenses records for Class 1 NICs purposes. Further guidance on the general principles of keeping records for Class 1 NICs purposes is contained at NIM05030