DANSP31600 | Notices of decision: Wording of National Insurance contributions liability decisions: Representative sample of employees

Where you are issuing decisions for a representative sample of employees, see DANSP41500. In a letter to the liable secondary contributor:

• tell them the National Insurance contributions (NIC) shown as due in the decision(s) are only part of the NIC you consider are due in respect of all the affected employees, and

• request the total unpaid NIC in respect of all affected employees.

Example

An employer gave two hundred employees a cash bonus, but did not include the bonuses in gross pay for Class 1 NIC. HMRC considers Class 1 NIC are due. The employer does not consider that Class 1 NIC are due. The unpaid NIC amount to £5 million. HMRC and the employer agree to select 5 employees as a representative sample for the purposes of issuing decisions and appealing to the tax tribunal.

HMRC decides to issue decisions setting out the total Class 1 NIC due and the total NIC paid for the tax year in which the bonuses were paid.

Each decision must show, in respect of the named employee, the total NIC due for the tax year, which includes

• total NIC reported as due for each employee, and

• the NIC due on the bonus.

The total NIC shown as due on all the decisions less the total NIC shown as paid on the named employees’ records amounts to £145,879.39, which is only part of the £5 million HMRC considers has yet to be paid.

In this example, the covering letter needs to tell the employer that £5 million is due to be paid and that the £145,879.39 included on the decisions is part of that amount.