Who Pays Class 1A National Insurance UK?
As a rule, there is no employee contribution payable on ‘payrolled benefits’. So, only employers need to pay Class 1A NICs.
They are liable on benefits provided to employees by reason of their employment and on ‘termination awards’ over £30,000.
A termination award is a payment made to an employee at the end of their employment (e.g. a redundancy payment).
Even so, employers would not have to pay Class 1A National Insurance contributions on a termination award if Class 1 NIC had already been paid on it.
Important: You can read more about National Insurance classes in another section. Different rules apply to the payment of Class 1A National Insurance on sporting testimonials (see below).
When to Pay Employers’ Class 1A NIC?
The deadline for paying Class 1A National Insurance contributions will depend on what they are for (e.g. on work benefits or for a termination award).
Work Benefits (BIK)
You need to pay your employers’ Class 1A National Insurance (P11D bill) on work benefits no later than the 22nd of July each year for the previous tax year. The deadline changes to 19th of July if you choose to pay by postal methods.
Employers need to pay Class 1A National Insurance on termination awards and sporting testimonials when they pay employers’ PAYE to HM Revenue and Customs (e.g. monthly or quarterly).
Online or Telephone Banking, Bacs, CHAPS
You can use these bank details to pay HM Revenue and Customs (HMRC) by Faster Payments, Bacs, or CHAPS.
Sort Code: 08 32 10
Account Number: 12001039
Account Name: HMRC Cumbernauld
The payment reference is a 17-character number that begins with your 13-character Accounts Office reference number. The final part of the assignment is the tax year that you are paying for and the digits ’13’.
A payment made in July 2016 for the previous tax year has a reference number of 123PA000123451613 (where the final four digits ‘1613’ refer to the 2015 to 2016 tax year).
Your Accounts Office reference number shows up on the letter you received from HMRC when you first registered as an employer and on the front of your payment booklet.
It is worth checking the transaction limits and processing times for the bank that you use before making a payment. But, in most cases:
- Making a payment by Faster Payments (e.g. online or telephone banking) would usually reach HM Revenue and Customs on the same or next day (includes bank holidays and weekends).
- Payments made by CHAPS within the processing times of your bank should reach HMRC on the same working day.
- Payments made by Bacs (previously called Bankers’ Automated Clearing System) will take at least three (3) working days.
Important: Do not add Class 1A National Insurance contributions to a standard PAYE payment. You must make a separate payment instead.
Making Overseas Payments
You will need to use these details if you want to use an overseas bank account to pay employers’ Class 1A National Insurance to HM Revenue and Customs (HMRC).
Account Number (IBAN): GB62BARC20114770297690 BARCGB22
Bank Identifier Code (BIC): BARCGB22
Account Name: HMRC Cumbernauld
HMRC Banking Address>
Barclays Bank PLC
1 Churchill Place
Note: Check the UK bank holiday calendar to see if the deadline date falls on a weekend or public holiday (e.g. Easter or New Year’s Day).
Debit or Corporate Credit Card (online)
You will encounter a non refundable fee if you choose to pay online using a corporate credit card. It cannot be a personal credit card.
Make your payment in full to ‘HMRC Cumbernauld’ office using your 17-character payment reference or use a different payment method.
Paying by Direct Debit
You can set up a single payment for Class 1A contributions through your HMRC online account (not an existing one for standard PAYE payments). Remember to use your 17-character payment reference.
It takes around five (5) working days to process a Direct Debit (the first time) and then around three (3) working days thereafter (if using the same bank details).
Paying at Bank or Building Society Branches
You must use your Class 1A payslip to make a payment by cash or cheque at your bank or building society (made payable to ‘HM Revenue and Customs only’).
Sending Cheques by Post
You must use the correct address and allow at least three (3) days if you want to send a cheque by post to pay HM Revenue and Customs for Class 1A NICs (street name, city name, PO box not required).
Make the cheque payable to ‘HM Revenue and Customs only’ and write your Class 1A reference number on the reverse side. Remember to include the correct payslip (unfolded) and do not use staples to fasten them together.
Failing to fill in the correct information on the cheque can delay the payment. You can include a separate note if you want to get a receipt.
Note: You can print your own Class 1A National Insurance contributions payment slip when paying by post (not at a bank).
Check if HMRC Received Your Payment
There are several ways to check if your payment has been received. For example, your bank or building society statement will confirm whether the payment has left your account – or not.
You can also check your HM Revenue and Customs (HMRC) online account or ask for a receipt if you are sending the payment by mail.
Class 1A NIC on Sporting Testimonials
For Class 1A purposes, a sporting testimonial is a type of event (or series of events) used to honour a player for their service. A typical example would be when a player ends their career in sport or retires altogether.
In such cases, the testimonial committee would need to pay Class 1A National Insurance if the payment made to a player is:
As a rule, the payment would be the profit realised from the event (or events). The committee would need to pay NICs on the payment using the same process they use to pay PAYE tax bills.
Note: The overview section explains more about running payroll as an employer and why you must keep proper records.