TCM0284395 - Specialist Areas - Complex: Complex cases - renewals - National Insurance check
Reasons not to follow this guidance
You do not need to follow this guidance if
- there are no children on the award
- the award of Tax Credits is for Working Tax Credit only
- it is not a complex case.
Checklist
Before you follow this guidance, make sure you
- are in the correct MU. See TCM0322460 for the correct MU number
- have the correct user roles to follow this guidance. Use the B&C Roles and Access Catalogue. You can find this by going to the Benefits & Credits homepage, selecting ‘R’ on the B&C A-Z index, selecting ‘Roles and Access Process’, selecting ‘Roles & Access Catalogue’ from the Related links menu
- have access to the National Tax Credit computer system (NTC)
- have access to National Insurance Pay As You Earn (PAYE) service
- have access to National Insurance PAYE Service (NPS).
Required Information
Confirmation is required that the person employed or self-employed in the UK is fully affiliated to the UK National Insurance Scheme (NI). Being fully affiliated the UK NI Scheme means paying UK Class 1 or Class 2 National Insurance Contributions (NICS) that are due.
This can be obtained from
- NPS
- the customer by either requesting sight of their pay slips or issuing the TC664 renewals letter
- the customer’s employer by issuing TC1115.
Background
An employment check is required
- on all cases where a child or children live in the European Member State (EUMS) and the customer is employed or self-employed in the UK
- where a child or children live in the UK and the customer who is employed or self-employed in the UK has a partner who is living in the EUMS and is employed under the legislation of the EUMS or is receiving a contributory (qualifying) benefit or a pension paid by the EUMS.
Where the child or children live in the EUMS, family benefits will be paid where the customer is working in the UK and affiliated to the UK NI Scheme.
As a worker, the person must be compulsorily insured in the UK, by this we mean liable to and paying either Class 1 or Class 2 NICS.
A customer cannot be regarded as being affiliated to the UK scheme where
- they claim a small earnings exception because their earnings are so small
- their earnings are below the lower earnings level therefore they do not pay Class 1 NICS
- they are self-employed but are not paying Class 2 NICS (e.g. - the claimant has liability to pay Class 2 but has failed to pay his or her bill or bills).
Where the child or children live in the UK, family benefits will be paid where the customer is
- working in the UK and has claimed a Small Earnings Exemption
or
- their earnings are below the Lower Earnings Limit for Class 1 NICS and their partner is employed under the legislation of the EUMS
or
- their partner is receiving a contributory benefit or pension paid by the EUMS.
A customer may have earnings that are above the Lower Earnings Limit (LEL) but below the Primary Threshold (PT) and Class 1 NI contributions are not being paid. In these instances the customer is actually treated as having paid Class 1 NI contributions. The customer will satisfy the relevant entitlement conditions for UK family benefits to be paid under EC regulations.
An employment check is necessary to determine whether the EC regulations can be applied.
Where the earnings of the customer, or their partner, fall
- above the LEL
- below the PT, and
- Class 1 NI contributions have not been paid
they should be treated as having paid Class 1 NI contributions and regarded as being subject to UK legislation.
Guidance
Note: When sending customer, staff or process data to another individual or team, make sure you follow the latest data security guidelines or contact the Data Guardian / Data Security Team for advice.
Step 1
If the customer is claiming Child Tax Credit (CTC) for a child or children in EUMS, go to Step 3.
If the customer is not claiming CTC for a child or children in EUMS, go to Step 2.
If you are returning to this guidance as the customer has returned TC664, go to Step 18.
If you are returning to this guidance as the customer employer has returned the TC1115, go to Step 19.
If you are returning to this guidance, as the BF date has expired and there has been no reply to either the TC664 or TC1115, contact your TALLO for further advice.
Step 2
Where the child or children are living in the UK with the customer or customers check if one or more of the customers
- are employed or self-employed in the UK
- are employed under the legislation of another EUMS
- is receiving payment of a contributory (qualifying) benefit or pension from another EUMS.
If any of the above criteria applies, go to Step 3.
If none of the above criteria applies, return to the guidance you were previously following.
Step 3
Check if the customer is employed or self-employed. For how to do this, use TCM1000188.
If the customer in the UK is self-employed, go to Step 4.
If the customer in the UK is employed, go to Step 13.
If the customer in the UK is not employed or self-employed, return to the guidance you were previously following.
Step 4
Using NPS establish if the customer has registered their self-employment
- access ‘NPS’ from your desk top
- in ‘resource group section’ select ‘OK,’ this will take you to ‘Open Person File’ box
- enter the customers ‘NINO’
- select ‘OK’, this will take you to ‘Identity Screen’ box
- select the ‘Liability Tab’
- select ‘Options’ from the drop down menu select ‘Build list’ This will take you to the ‘Liabilities Summary’ Screen
- go to Step 5.
Step 5
If there is a date held in the ‘Liabilities Summary’ Screen for when the customer started to trade as a self-employed person
- access ‘NPS’ from your desk top
- in ‘Resource Group Section’ select ‘OK,’ this will take you to ‘Open Person File’ box
- enter the customers ‘NINO’
- select ‘OK’, this will take you to the ‘Identity Screen’ box
- fastpath to the ‘Financials’ folder
- select ‘Options’ from the drop down menu
- select ‘Fastpath’ to ‘Financials’. This will take you to the ‘Financials screen’
- select ‘Options’ from the drop down menu
- select ‘Build list’
- go to Step 6.
If there is no date held in the ‘Liabilities Summary’ Screen
- phone the customer to obtain the date the customer registered their self-employment.
Follow the guidance in TCM0094100
- go to Step 10.
Step 6
Using NPS check the self-employed customer’s bill status. For how to do this, use TCM1000146.
If the status of ‘Paid’ is shown, the self-employed person has paid their bill in full
- make a note on the TC648 that the customer is liable to pay and is paying class 2 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the status of ‘Part Paid’ is shown, the self-employed person has paid part of their bill, however there is still an outstanding amount
- make a note on the TC648 that the customer is liable to pay and is paying class 2 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the status of ‘Unpaid’ is shown, the self-employed person has been sent a bill and that bill is still outstanding, go to Step 7.
If the status of ‘Not Applicable’ is shown, the self-employed person’s conditions may have changed, go to Step 9.
If there is no status in the ‘Entry field’, go to Step 9.
Note: Bill details will only be created in the bill summary and bill details window once a bill has been produced.
Note: Where a self-employed person makes a part payment any outstanding payments will usually be requested when the next bill is issued.
Step 7
The bill status field shows the self-employed persons current bill as ‘Not Paid’ or ‘Unpaid’
- check the ‘Latest Date of Issue’ field
- make a note of the date the customer has to pay their bill on the TC648
- go to Step 8.
Note: Bills issued in October 2011 will require payment form the self-employed person by 31 January 2012.
(This bill covers the period 6 April 2011 to 5 October 2011).
Note: Bills issued in April 2012 will require payment from the self-employed person by 31 July 2012.
(This bill covers the period 5 April 2012 to 6 April 2012).
Step 8
If the date you are working on is past the date the self-employed person is expected to pay their bill,
- complete the TC664 using the address held on NTC from SEES. For how to do this use, TCM1000124
- issue the TC664 to the customer
- set a clerical BF of 30 days
- update the Application Notes with the message II76 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- take no further action.
If the date you are working on is on or before the date the self-employed person is expected to pay their bill,
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
Step 9
The bill status field shows a status of ‘Not Applicable’ or there is ‘No Status’
Note: This is an indication that the conditions under which the bill was originally issued may have changed.
- access ‘NPS’ from your desk top
- in ‘Resource Group Section’ select ‘OK,’ this will take you to ‘Open Person File’ box
- enter the customer’s ‘NINO’
- select ‘OK’, this will take you to ‘Identity Screen’ box
- select the ‘Liability Tab’
- select ‘Options’ from the drop down menu
- select ‘Build list’ this will take you to the ‘Liabilities Summary’ Screen
- check to see if the self-employed person has been granted a ‘Small Earnings Exception’
If the Liabilities Folder shows a valid ‘Small Earnings Exception’,
- make a note on the TC648 that the customer working in the UK is not liable to pay and is not paying class 1 or class 2 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the Liabilities Folder do not shows a valid ‘Small Earnings Exception’,
- complete the TC664 using the address held on NTC from SEES. For how to do this use, TCM1000124
- issue the TC664 to the customer
- set a clerical BF of 30 days
- update the Application Notes with the message II76 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- take no further action.
Step 10
Note: The customer has 3 months to register their self-employment from the date they started to trade as a self-employed person.
If you were able to contact the customer and the customer has confirmed that they have not registered their self-employment, go to Step 11.
If you were able to contact the customer and the customer has confirmed that they have registered their self-employment, go to Step 11.
If you were unable to contact the customer by phone,
- complete the TC664 using the address held on NTC from SEES. For how to do this use, TCM1000124
- issue the TC664 to the customer
- set a clerical BF of 30 days
- update the Application Notes with the message II76 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- take no further action.
Step 11
If 3 months have elapsed since the customer started working as a self-employed person
- make a note on the TC648 that the customer is not liable to pay and is not paying class 2 NICS
- disallow the CTC
- complete SEES DL1901 from SEES. For how to do this, use TCM1000124
- E-mail the DL1901 to Self-Employment Services, (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- return to the guidance you were previously following.
If 3 months have not elapsed since the customer started working as a self-employed person
- make a note on the TC648 that the newly self-employed person is liable to pay and is paying class 2 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
Step 12
Check the employer’s PAYE reference number, for the customer who lives and works in the UK, matches the customer’s’ employment details. For how to do this, use TCM1000234.
If the employer’s PAYE reference number for the customer who is living and working in the UK matches the customer’s employment details
- make a note on the form TC648 that you have traced and matched the employer
- go to Step 16.
If the employer’s PAYE reference number for the customer who is living and working in the UK does not match the customer’s employment details
- phone the employer to obtain the following information
- confirmation that the customer works for them
- the employer’s PAYE reference number or the reason why they do not have a PAYE reference number
- details of the customer’s PAYE scheme
- confirmation that they are liable to pay and are paying class 1 NICS.
Note: When contacting an employer you must follow the guidance in TCM0094100.
- go to Step 13.
Step 13
If you are able to contact the employer by phone, go to Step 14.
If you are unable to contact the employer by phone, go to Step 15.
Step 14
If the employer has told you they do not have a record of the customer ever working for them, contact your TALLO for advice.
If the employer has told you the customer used to work for them, but has now left their employment, contact your TALLO for advice.
If the employer has told you the customer works for them, confirms they have a PAYE scheme and provides you with their PAYE reference number and pays or usually pays class 1 NICS,
- make a note on the TC648 that the customer is liable to pay and is paying class 1 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the employer has told you the customer works for them and provides you with their PAYE reference number and the customer’s NI contributions are not consistent but they usually pay Class 1 NICS
- make a note on the TC648 that the customer is liable to pay and is paying class 1 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the employer has told you the customer works for them and provides you with their PAYE reference number and the customer’s NI contributions are not consistent and they do not usually pay Class 1 NICS
- make a note on the TC648 that the customer is not liable to pay and is not paying class 1 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the employer has told you the customer works for them but does not pay class 1 NICS and the employer does not have a PAYE reference number
- make a note on the TC648 that the customer is not liable to pay and is not paying class 1 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the employer can not provide you with all the information you require,
- make a note on the TC648 that you cannot trace and match the customer’s employer
- complete the TC1115 from SEES. For how to do this, use TCM1000124
- issue the TC1115 to the customer’s employer
- set a clerical BF date of 30 days
- update the Application Notes with the message II76 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- take no further action.
Step 15
- complete the TC1115 from SEES. For how to do this, use TCM1000124
- issue the TC1115 to the customer’s employer
- set a clerical BF date of 30 days
- update the Application Notes with the message II76 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- take no further action.
Step 16
Using NPS check the customer is employed and paying Class 1 NICS
- access ‘NPS’ via your desktop
- in ‘Resource Group’ Selection
- select ‘OK’, this will take you to ‘Open Person File’ box
- enter customer’s or partner’s ‘NINO’
- select ‘OK’, this will take you to ‘Identity Screen’ box
- select ‘Contribution’ page the ‘Option’ from the top tool bar, then ‘Build list’ from the drop down menu, this will then show the following information
- the tax years that the customer is due to pay NICS
- details of the contributions / credits that the customer has made for the tax years concerned
- double click on the relevant tax year where the type category shows ‘C 1’
- this will bring you to the Class 1 contributions folder for the employment for the year you have specified
- on your tool bar select ‘Options’
- in the drop down menu select view ‘Class 1 employment history’
- make a note on the TC648 of any periods of non payment
- go to Step 17.
Step 17
Note: The amount and type of NICS a customer pays depends on what they earn. For information on the rates of NI contributions payable go to
If NPS shows payments of Class 1 NICS as verified and the customer regularly pays Class 1 NICS,
- make a note on the TC648 that the customer is liable to pay and is paying class 1 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If NPS shows payment of Class 1 NICS as verified and also shows the customer’s Class 1 NICS are not consistent due to varying hours of employment but the customer usually pays Class 1 NICS,
- make a note on the TC648 that the customer is liable to pay and is paying class 1 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If NPS shows payment of Class 1 NICS as verified and also shows the customer’s Class 1 NICS are not consistent due to varying hours of employment and the customer does not usually pay Class 1 NICS
- make a note on the TC648 that the customer is not liable to pay and is not paying class 1 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If NPS shows that payment of Class 1 NICS is not verified
- complete TC1115 from SEES. For how to do this, use TCM1000124
- issue the TC1115 to the customer’s employer
- set a clerical BF date of 30 days
- update the Application Notes with the message II76 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- take no further action.
Step 18
Using the information on the TC664
If the customer has responded to a TC664 regarding a change of circs in their self-employment, contact your TALLO.
If the customer has responded to an enquiry about the date they registered their self-employment, go to Step 11.
If the customer has provided evidence that they have paid their latest class 2 bill
- make a note on the TC648 the customer is liable to pay and is paying class 2 NICS
- return any evidence the customer has provided back to the customer
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the customer has provided evidence that they hold a small earning exception
- make a note on the TC648 the customer is not liable to pay is not paying class 2 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the customer has not provided any evidence that they have paid their latest class 2 bill
- make a note on the TC648 the customer is not liable to pay and is not paying class 2 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
Step 19
Using the information on the TC1115
If the employer confirms that the customer is liable to pay and is paying class 1 NICS
- make a note on the TC648 that the customer is liable to pay and is paying class 1 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the employer confirms that the customer usually pays class 1 NICS
- make a note on the TC648 that the customer is liable to pay and is paying class 1 NICS
- update the Application Notes with the message II81 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the employer confirms that the customer is not liable to pay and is not paying class 1 NICS
- make a note on the TC648 that the customer is not liable to pay and is not paying class 1 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.
If the employer confirms that the customer does not usually pay class 1 NICS
- make a note on the TC648 that the customer is not liable to pay and is not paying class 1 NICS
- disallow the CTC
- update the Application Notes with the message II74 from TCM0160040. For how to do this, use TCM1000028
Note: You must follow the guidance in TCM0152060 when you record the note and also follow the guidance in TCM0152040.
- return to the guidance you were previously following.