National Insurance numbers

If you have lost or forgotten your National Insurance number you should try and locate the number on paperwork such as your tax return, payslip or P60. You can also login to your personal tax account to view, download, print, save or share a letter with your National Insurance number.

If you do not already have a National Insurance number then you will normally need to apply for one if you are planning to work in the UK, claim benefits, apply for a student loan or pay Class 3 voluntary National Insurance contributions.

However, HMRC’s guidance presently states that: You can currently only apply for a National Insurance number in England, Scotland and Wales if you have entered the UK on a visa. You cannot apply for a National Insurance number in Northern Ireland. This is due to Coronavirus (COVID-19) disruption.

You can, however, start work without a National Insurance number if you can prove you can work in the UK.  You can also apply for benefits or a student loan without a National Insurance Number.

Teenagers should automatically be sent a letter just before their 16th birthday detailing their National Insurance number. These letters should be kept in a safe place. The old plastic National Insurance cards that some of our readers may remember are no longer available.

Apply for NIC Childcare Credits

National Insurance credits can help qualifying applicants to fill gaps in their National Insurance record. This can assist taxpayers to build up the amount of qualifying years of National Insurance contributions which can increase the amount of benefits a person is entitled to such as the State Pension.

National Insurance credits are available in certain situations where people are not working and, therefore, not paying National Insurance credit. For example, credits may be available to those looking for work, who are ill, disabled or on sick pay, on maternity or paternity leave, caring for someone or on jury service.

The CA9176 form is used to apply for National Insurance childcare Class 3 credits if you are an adult family member caring for a child under 12 (usually while the parent or main carer is working). This form has been updated to include care that is being provided from a distance because of Coronavirus (COVID-19) – for example, by telephone or video if the carer was required to self-isolate. This Coronavirus measure applies to the 2019-20 and 2020-21 tax years.

Depending on your circumstances, National Insurance credits may be applied automatically or an application for credits may be required. There are two types of National Insurance credits available, either Class 1 or Class 3. Class 3 credits count towards the State Pension and certain bereavement benefits whilst Class 1 covers these as well as other benefits such as Jobseeker’s Allowance.

Spring Budget 2020 – National Insurance

The new Chancellor, Rishi Sunak, has confirmed a Conservative manifesto promise to increase the National Insurance contributions (NIC) thresholds to £9,500. Plans to meet the manifesto pledge were first confirmed by Mr Sunak's predecessor Sajid Javid earlier this year.

The increase by more than 10% over the current year’s figure of £8,632 will apply to both the employed and self-employed. The government have also pledged to increase the threshold to £12,500 by the end of the current session of Parliament.

This means that from next month some 31 million taxpayers will benefit from this change with a typical employee saving around £104 and a self-employed person, paying a lower rate of National Insurance benefiting from a £78 cut in their NIC contributions.

The cut means that employees earning £9,500 or less will pay no National Insurance whatsoever. The government has confirmed that the threshold changes will not affect low earners’ entitlement to contributory benefits such as the State Pension, with the Lower Earnings Limit and Small Profits Threshold. The working age benefits will also be uprated in line with inflation from April 2020, ending the freeze on these benefits that has been in place since 2016.

Checking your NIC records

HMRC offers an online service to check your National Insurance Contributions (NIC) record online. In order to use the service, you will need to have a Government Gateway account. If you don't have an account, you can apply to set one up online.

By signing in to the 'Check your National Insurance record' service you will also activate your personal tax account if you haven’t already done so. The personal tax account can be used to complete a variety of tasks, for example, updating an address or managing your child benefits.

Your National Insurance record online will let you see:

  • What you have paid, up to the start of the current tax year (6 April 2019)
  • Any National Insurance credits you’ve received
  • If gaps in contributions or credits mean some years don’t count towards your State Pension (they aren't 'qualifying years')
  • If you can pay voluntary contributions to fill any gaps and how much this will cost

In many circumstances it can be beneficial to make voluntary contributions to increase your entitlement to benefits, including the State or New State Pension.

Changes to NIC from April 2020

The Chancellor, Sajid Javid, has confirmed that a Conservative manifesto promise to increase the National Insurance contributions (NIC) thresholds to £9,500 will apply from April 2020. The increase, by more than 10% over the current year’s figure of £8,632, will apply to both the employed and self-employed.

Some 31 million taxpayers will benefit from this change with a typical employee saving around £104 and a self-employed person £78 in 2020-21.

All other thresholds for 2020/21 will rise with inflation, except for the upper NIC thresholds which will remain frozen at £50,000. These measures were announced in the 2018 Autumn Budget.

Announcing the cuts, the Chancellor said:

'We’re determined to do what we promised and put more money into the pockets of ordinary hard-working people. That’s why we’re starting this Government as we mean to go on, by cutting their bills.

We want everyone to feel that they can contribute to the new chapter we are opening for the economy and our country, because under this Government work will always pay.'

The Government has also confirmed that the threshold changes will not affect low earners’ entitlement to contributory benefits such as the State Pension, with the Lower Earnings Limit and Small Profits Threshold. The working age benefits will also be up-rated in line with inflation from April 2020 ending the freeze on these benefits that has been in place since 2016.

When National Insurance Credits can be claimed

National Insurance credits can help qualifying applicants to fill gaps in their National Insurance record. This can assist taxpayers to build up the amount of qualifying years of National Insurance contributions and thus increase the amount of benefits a person is entitled to receive, for example, the State Pension.

National Insurance credits are available in certain situations where people are not working and not paying National Insurance credits. For example, credits may be available to those looking for work, who are ill, disabled or on sick pay, on maternity or paternity leave, caring for someone or on jury service.

Depending on the circumstances, National Insurance credits may be applied automatically or an application for credits may be required. There are two types of National Insurance credits available, either Class 1 or Class 3. Class 3 credits count towards the State Pension and certain bereavement benefits whilst Class 1 covers these and other benefits such as Jobseeker’s Allowance.

There are usually no National Insurance credits available to the self-employed that need to pay Class 2 National Insurance or for older married women who chose to pay a reduced rate of National Insurance (pre-April 1977).

When NIC credits can be claimed

National Insurance credits can help qualifying applicants to fill gaps in their National Insurance record. This can assist taxpayers to build the amount of qualifying years of National Insurance contributions, which can increase the amount of benefits a person is entitled to, such as the State Pension.

National Insurance credits are available in certain situations when people are not working and, therefore, not paying National Insurance. For example, credits may be available to those looking for work, who are ill, disabled or on sick pay, on maternity or paternity leave, caring for someone or on jury service.

Depending on the circumstances, National Insurance credits may be applied automatically or an application for credits may be required. There are two types of National Insurance credits available, either Class 1 or Class 3. Class 3 credits count towards the State Pension and certain bereavement benefits whilst Class 1 covers these as well as other benefits such as Jobseeker’s Allowance.

There are usually no National Insurance credits available to the self-employed that need to pay Class 2 National Insurance or for older married women who chose to pay a reduced rate of National Insurance (pre-April 1977).

NIC after State Pension Age

If you have reached the State Pension age and continue to work in most cases, you no longer need to pay National Insurance Contributions (NICs).

At State Pension age, the requirement to pay Class 1 and Class 2 NICs ceases. However, you will remain liable to pay any NICs due to be paid to you before reaching the State Pension age. If you continue working, you need to provide your employer with proof of your age.

Your employer remains liable to pay secondary Class 1 employer NICs. If you would rather not provide proof of age to your employer, you can request a letter (known as an age exception certificate) from HMRC confirming you have reached State Pension age and are no longer required to pay NICs.

If you are self-employed, you will need to pay Class 4 NICs for the remainder of the tax year in which you reach State Pension age but will be exempt from the following year.

We can help you check if you think you may have overpaid NICs and arrange for a refund if an overpayment has occurred.

National Insurance if you work abroad

If you move abroad, it can often be advantageous to continue paying your UK National Insurance Contributions (NICs) in order to preserve your entitlement to the UK State Pension and other benefits. If you are working in the European Economic Area (EEA), the rules depend on your situation (see below). The EEA includes all EU countries as well as Iceland, Liechtenstein and Norway. The same rules apply in Switzerland.

The rules are as follows:

  • If you work for an employer in the EEA: You will normally pay social security contributions in the EEA country you work in instead of NICs. This means you will be covered by that country’s social security laws and may be entitled to benefits, but your entitlement to benefits in the UK (for example State Pension) may be affected as there’ll be a gap in your NICs.
  • If your UK employer sends you to work in the EEA: You might be able to carry on paying NICs if you are abroad for up to 2 years. This means you won’t have to pay social security contributions abroad. There is a special form which your employer must complete to notify HMRC.
  • There are special rules if you are self-employed or working in two or more EEA countries (including the UK).
  • Some countries have a Reciprocal Agreement (RA) or Double Contribution Convention with the UK. These countries include the USA and Japan. You will usually pay social security contributions in that country instead of NICs.
  • For all other countries. You can usually continue paying NICs for the first 52 weeks you are abroad and if you meet the qualifying conditions.

Of course, depending on the Brexit outcome, the rules for EU/EEA countries could be open to change.

When are Class 1A NICs due

Class 1A NICs are paid by employers in respect of most benefits in kind provided to employees, for example, the use of a company car. There are no Class 1A employee contributions payable.

Class 1A NICs are due in respect of most benefits provided to:

  • directors and certain other persons in controlling positions,
  • employees,
  • members of the family or households of the above.

Where a benefit is provided as part of a salary sacrifice or other optional remuneration arrangement (OpRA), special rules apply and the Class 1A NICs are calculated as a percentage of the relevant chargeable benefit.

Certain conditions must apply before Class 1A NICs are due. These conditions are that the:

  • benefit must be from, or by reason of, an employee's employment and must be chargeable to Income Tax under ITEPA 2003 on an amount of general earnings as defined at Section 7(3) ITEPA 2003;
  • employment must be 'employed earner’s employment' under social security law and employment as a director or an employee;
  • benefit must not already attract a Class 1 NIC liability.

There is a statutory exemption for qualifying trivial benefits in kind costing £50 or less. The tax-free exemption (and therefore exemption from Class 1A NIC) applies to small non-cash benefits like a bottle of wine or a bouquet of flowers given to employees. It also applies to any other BiK classed as 'trivial' that falls within the exemption. An annual cap of £300 is applicable to directors or other office-holders of close companies and to members of their families or households.