NIM12119 - Class 1: treating as paid: NICs cannot be treated as paid: removing NICs from the NI record

Regulation 60 of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Regulation 60 provides for the removal of NICs from a person’s NI record when their employer has not paid them to HMRC.

You must check if any NICs that have not been paid are already recorded as paid on the NI record. This could arise, for example, where details of the NICs were reported through RTI and therefore posted to their NI record but were not subsequently paid to HMRC.

Where investigations (for example, enquires about an insolvent company) confirm this to be the case, the unpaid Class 1 NICs cannot be shown as paid and must be removed from the NI record. However, no action to remove the NICs should be taken until the investigations have been concluded.

Where it is established that the failure to pay primary Class 1 NICs arose due to:

• the consent or connivance of the employee (see NIM12115) or
• negligence on the part of the employee (see NIM12116)

the NICs should be removed from the employees NI record and the employee advised that we consider them to be a negligent employee (see NIM12116).

When removing any NICs from the NI record, you must make sure that you only remove NICs for employments where it has been established that those NICs were not paid.

Example

An employee has unpaid NICs of £500 with Company A that have been recorded as paid on the NI record. They have NICs of £200 that have been correctly paid in full with Company B.

You must only remove the unpaid NICs of £500 for Company A from the NI record. The £200 with Company B has been correctly paid and must remain as paid on the employee’s record.

Where enquiries confirm that a failure to pay primary Class 1 NICs did not occur with the consent or connivance of the employee and was not due to any negligence on their part, any unpaid NICs that are shown as paid must still be removed from the NI record. This is because unpaid NICs cannot be recorded to the NI record with a status of “paid”. However, the primary element of those unpaid NICs can then be returned to the record with a status of “treated as paid”.