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Understanding Your National Insurance Correction Letter from HMRC
If you've recently corrected your National Insurance contributions through HMRC's online system, you may receive a letter from HMRC explaining what they've found. These letters are sent to employers who have made corrections to National Insurance payments using their Business Tax Account after 6...
If you've recently corrected your National Insurance contributions through HMRC's online system, you may receive a letter from HMRC explaining what they've found. These letters are sent to employers who have made corrections to National Insurance payments using their Business Tax Account after 6 November 2022. Understanding what your letter means and what action to take can help you resolve any issues quickly.
Why You've Received a National Insurance Correction Letter
You'll receive a correction letter from HMRC if you've used your Business Tax Account to adjust National Insurance contribution payments that were made after 6 November 2022. This date is significant because it relates to changes in National Insurance rates that took place in November 2022, which led to some employers needing to correct their records.
The letter will explain what HMRC has found when they reviewed your correction, and whether any action is needed from you.
Common Reasons for National Insurance Corrections
Employee Not Found
One reason you might receive a correction letter is that HMRC cannot find your employee's details in their system. This can happen if:
- The employee's National Insurance number was incorrect
- Personal details don't match HMRC's records
- The employee is new to the system
If your letter says HMRC cannot find your employee, you need to provide additional information to help identify them. This includes their date of birth and any past addresses you have on record.
Overpayments Due to Rate Changes
The National Insurance rate change on 6 November 2022 created situations where some employers overpaid contributions. Your correction letter may confirm that you or your employee did overpay employer secondary National Insurance contributions. Secondary contributions are the National Insurance payments that you as an employer pay on top of your employees' earnings.
Similarly, HMRC may have identified an overpayment after one of your employees submitted a refund request.
HMRC Disagrees with Your Correction
In some cases, HMRC's letter will advise that you have not overpaid National Insurance contributions, which may differ from what you believe to be correct.
What Action You Need to Take
The action you need to take depends on what your correction letter says.
If Your Employee Could Not Be Found
You must send HMRC any information you have about the employee to help them locate the correct record. Include:
- The employee's date of birth
- Past addresses for the employee
- Any other relevant details
Send your letter to:
HM Revenue and Customs
National Insurance Contributions and Employer Office
BX9 1BX
Make sure you include the reference 'NILEVY061122' on your correspondence so HMRC can match it to your case.
If You've Overpaid National Insurance
If HMRC has confirmed you overpaid employer secondary National Insurance contributions, you need to check your PAYE Online account to see how the credit will be applied.
Follow these steps:
1. Sign in to your PAYE Online for Employers account
2. Look at your latest monthly statement
3. Check the 'Credits' section (shown in the centre of the statement) for any credit applied for secondary National Insurance contributions
If you have no current National Insurance liability, the credit will appear under 'Upcoming payments' on the right side of your screen. It will be labelled as an 'unallocated credit'. When this happens, you don't need to take any further action – the credit will remain on your account to offset future payments.
If You Disagree with HMRC's Decision
If your letter states that you have not overpaid National Insurance contributions but you believe this is incorrect, you have the right to challenge this decision.
You'll need to send HMRC evidence to support your position. This evidence should include documentation of any deductions that apply to reduce your National Insurance liability.
Send your evidence to:
HM Revenue and Customs
National Insurance Contributions and Employer Office
BX9 1BX
Again, include the reference 'NILEVY061122' with your evidence.
Responding Promptly
When you receive a National Insurance correction letter, it's important to review it carefully and respond promptly if action is required. Delays in providing information about employees or evidence to support your correction can slow down the resolution process.
Keep copies of any correspondence you send to HMRC, and consider sending letters by recorded delivery so you have proof of postage.
Getting Help
National Insurance corrections can be complex, particularly when they relate to specific rate changes or involve multiple employees. If you're unsure what your correction letter means or what evidence you need to provide, your accountant can review the letter and help you respond appropriately.
Sources
This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.
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