NIM12101 - Class 1: Deeming and treating as paid: Introduction

NIM01001 provides general information on liability to pay Class 1 NICs.

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

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

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

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, you will need to establish

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

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