National Insurance (NI) Debt

Class 1 National Insurance

Employers and their employees pay Class 1 National Insurance contributions. There are 2 types of contribution made into an employee’s Class I National Insurance as follows:

  • The employees National Insurance (primary contribution) is deducted from an employees pay
  • The employers National Insurance (secondary contribution) is paid by the employer

Both of these contributions are dependent on the employee’s earnings and are set by specified contribution rates.

Employers are also obliged to pay Class 1A and 1B National Insurance annually on benefits and expenses given to their employees, again at a specified rate.

It is important to note that directors are classed as employees and pay National Insurance on salary and bonuses. Although these contributions are calculated on annual earnings rather than what is earned in each pay period, they are still payable to HMRC when the company payroll is run, be it weekly, monthly or quarterly.

What happens if I am in National Insurance Debt?

As with all aspects of HMRC debt, payment is pursued in full and the emphasis is on the company to ensure payments are kept up to date.