Chapter DMBM665860

Published date29 April 2016
Record NumberDMBM665860
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

You should be able to deal with the vast majority of defences to court actions where the NIC liability is disputed, for example where the defendant claims he has paid the debt.

However in proceedings involving any class of National Insurance Contributions (NICs) where you receive a defence which questions the liability to pay NICs, you may need to invite the court to order an officer of the Board to make a decision under Section 8 of the Social Security (Transfer of Functions, etc.) Act 1999; for example:

  • whether a person for whom you are claiming contributions is an ‘employed person’
  • what contributions, if any, are payable
  • claims for small earnings exemption (SEE).

If a defence is received the higher debt manager should examine it as in DMBM665770.

Determining the liability for NICs

The court cannot make decisions on liability to NICs.

Section 117A of the Social Security Administration Act 1992 provides that that the question of liability must be determined by an officer of the Board making a decision under Section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999.

The debtor has a right of appeal against such decisions to the Commissioners for Her Majesty’s Revenue and Customs who can confirm or vary the decision.

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Action by debt technical office

In order to deal with a defence of this type, you should invite the court to order an officer of the Board to make decision under Section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999.

Prepare three copies of the order on plain paper, different ones where the question affects either:

* only one employee (Class1/1A contributions), see DMBM665862
                * more than one employee (Class1/1A contributions), see [DMBM665864](https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmbm665864)
                * Class 2 contributions, see DMBM665866
                

As well as obtaining the order, you should also ask that the court adjourn the proceedings, with liberty to restore the case once the decision has become final and conclusive (DMBM665940).

Do this in good time before the hearing.

However if the NICs form only part of the claim it is probably better to ask the court, at the listed hearing, for an order for an officer of the Board to make a decision under Section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999.

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Attending the defence hearing

If attendance at the court hearing is necessary you should:

  • ask that an...

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