DANSP24700 | Decision types: Whether National Insurance contributions paid in excess of maximum

Regulation 155A(3)(a) of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

The Social Security Contributions (Transfer of Functions, etc.) Act 1999 (The Transfer Act)

Regulation 155A(3)(b) provides for HMRC officers to decide whether there has been a payment of National Insurance contributions (NIC) in excess of the maximum specified in regulation 21 of the Regulations (the annual maximum), see NIM37010.

If NIC have been paid in excess of the annual maximum, the person who has paid those NIC may apply for a refund.

Do not make decisions about whether there has been a payment of NIC in excess of the maximum where decisions falling within section 8(1)(c) (NIC liability decisions) or section 8(1)(d) (entitled to pay decisions) of the Transfer Act should be made, see DANSP15600 and DANSP16500.

There will be occasions where it is not appropriate to issue either a liability or entitled to pay decision with a paid decision, to conclude whether a refund is due or not. This will be the case where a person considers that they have paid more than the annual maximum but they have not. In these cases, issue a decision under regulation 155A(3)(b) of the Regulations.

Example

John Clark had two employments in the 2019 to 2020 tax year. He paid Class 1 NIC with both employers. He contacted HMRC to request a refund of Class 1 NIC paid with one of the employers. HMRC calculated that John Clark had not paid Class 1 NIC in excess of the annual maximum specified in regulation 21 of the Regulations. John Clark asserts that the annual maximum should not be calculated based on 53 weeks. If it was based on 52 weeks there would be a small excess amount. John Clark insists on a right of appeal. HMRC are unable to resolve the dispute so issue a section 8 decision which tells John Clark that he did not pay more than the annual maximum.

Commentary on example

In this example, before issuing a decision, HMRC should have told John Clark how the maximum specified in regulation 21 of the Regulations was calculated and what John Clark paid during the 2019 to 2020 tax year with both employments to illustrate that he had not paid above the maximum.

For guidance about the wording of such a decision see DANSP40000.