SolvedNIM07069 | Class 1 NICs: Payments made under employment legislation: Re-allocating primary NICs paid on a payment made under a reinstatement order, a re-engagement order, an order for the continuation of a contract of employment or a protective award:
From HM Revenue & Customs · National Insurance Manual
Period to which payment relates falls wholly in two or more tax years other than the one in which the NICs were paid
As explained in NIM07066, an employee who has paid NICs on a payment made under:
may request that those NICs are treated as paid in an earlier tax year to the one in which the NICs were actually paid if this will protect or enhance their benefit/pension position for the earlier year.
Where the period to which the payment relates falls wholly in two or more tax years other than the one in which the NICs were paid, the NICs may be treated as paid in proportion for each of the tax years in which the period to which the payment relates falls.
Example
Employer J makes a payment under a protective award to an employee on 11 April 2025. NICs are paid on that date (ie in the 2025/26 tax year). The payment represents arrears of pay for the period 1 March 2024 to 28 February 2025 (ie, the 2023/24 and 2024/25 tax years).
As the period to which the payment relates – 1 March 2024 to 28 February 2025 –falls wholly in two or more tax years – 2023/24 and 2024/25 - other than the one in which the NICs were paid - 2025/26 - the NICs can, if the employee so requests, be treated as paid proportionately for the 2023/24 and 2024/25 tax years.
For details on how to apportion the amount of NICs paid, see NIM07070.