National Insurance (Hansard, 16 February 1996)

§ Mr. Heald

The administration of national insurance operational matters is for Mrs. Faith Boardman, the chief executive of the Contributions Agency. She will write to the hon. Member,

Letter from Faith Boardman to Mr. Spencer Batiste, dated 15 February 1996: As Chief Executive of the Contributions Agency, I have responsibility for answering questions about operational matters relating to the Agency and the National Insurance (NI) scheme. I have been asked to reply to your question regarding the methods used to guarantee employees that their current or previous employers have forwarded their part of National Insurance contributions (NICs). A number of measures are in place which directly or indirectly monitor the requirement for employers to pay NICs and to ensure that the Agency receives these NICs. Employers are required to make payments monthly (quarterly for some small employers) to the Collector of Taxes for tax and NICs due that month. At the end of the tax year the employer has to send a statement (P35) to the Inland Revenue of the years total of tax and NICs for all employees. The Inland Revenue ensures that the balance of payments due at that time is collected. Employees' individual returns of tax and NICs are also sent to the Inland Revenue and forwarded to the Agency. Any discrepancies between the figures on the employer's annual statement (P35) and the aggregated total on the individual returns (P14s), are identified and followed up by the Agency. Missing individual returns may be identified by this process. Employees' returns showing no NICs due but substantial tax earnings may be queried and followed up by the Agency with the employer (but there are still some legitimate reasons for tax due but no NICs due e.g., pension payments). The Agency has a programme of visiting employers to check their compliance with NI law and to also offer advice and guidance. Around 10% of employers are scheduled for visit in 1995/96. The Inland Revenue also has a programme of making audit visits to employers; the Agency and Revenue work closely together to avoid duplication of effort. The Agency has measures in place to enable employees themselves to identify any discrepancy. Firstly, an employee is entitled to a certificate (P60). at the end of the tax year, of the tax and NICs deducted. This P60 should be a copy of the P14 which the employer sends in. The employer may at that stage contact the Revenue or the Agency about any discrepancy or non receipt. Once the majority of employers' end of year returns are expected to have been received, the Agency has an established system of sending individual notices to certain people for whom no contributions have been received or an amount insufficient to benefit qualification has been received. The Agency can take action to resolve any queries which are from these notices. Whether or not a deficiency notice has been sent, an employee can ask the Agency at any time for a statement of their NICs received and their effect on benefit. These queries may also be received subsequent to a request for a state Retirement Pension Forecast. These statements record the recent tax years where there are any NI deficiencies and what may be done about that deficiency.