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鈥檚 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 鈥渄eemed鈥� and 鈥渢reated as paid鈥�. 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.