§ Mr. Gryllsasked the Secretary of State for Social Services what reduction in entitlement to state pension and other national insurance benefits may be made in the case of a director of a company which has gone into liquidation; and, if the national insurance contributions owed by the company at the date of liquidation are subsequently paid by the liquidator or the directors, whether the director's benefit entitlement will then be restored.
376W
§ Dr. BoysonCompany directors are generally liable for class 1 (employed earners') national insurance contributions, as being office holders. Where class 1 national insurance contributions are paid after the due date but before the end of the tax year in which they fall due, the late payment does not have any adverse effect on state pensions or other national insurance benefits. Where, however, contributions are paid after the tax year in respect of which they are due but before the end of the second following tax year, they do not in general count for short-term benefits, such as sickness benefit, for six weeks from and including the date of payment, and this may affect benefit entitlement; if they are paid after the end of the second year, they do not normally count at all and consequently this may reduce or remove title to short or long term benefits. Unpaid class 1 contributions are normally treated as having been paid on time for employees where the failure to pay was not with the consent or connivance of or attributable to any negligence on the part of the employee. However, this is unlikely in the case of a co-director because of the very nature of his responsibilities in the business.