Peter Arrowsmith, FCA

NATIONAL INSURANCE CONSULTANCY

Specialist technical support and other services for professionals

Recent issues arising include -

Some years ago my fellow directors and I were paid bonuses by life policy premiums. In 1999, we paid the NIC without prejudice. I know that the Revenue won a case involving platinum sponge - but they have refunded our money. Can we really keep it?

My client is married woman who has been continuously self-employed since 1974 and has never paid the Class 2 'stamp'. She has just had a bill for 25 years arrears. Isn't it limited to six years - and why should she pay anything?

My client went to work in France for 18 months. It has now been established that he should have paid French contributions from the start and UK Class 1 has been refunded. But they have also refunded Class 1A. Is this really appropriate?

I have a substantial employment but am also self-employed (profits in excess of the upper limit). Now that there is unlimited NIC liability for both employees and the self-employed, I presume that there is no longer a maximum amount of annual NICs and that I can no longer claim deferment either. Can you help me?

My clients paid Class 1 contributions in respect of payments made in a Funded Unapproved Retirement Benefits Scheme in 2000. I have read that there is no liability, in fact, on such a transaction. However, HM Revenue & Customs has refused our repayment claim. Is this correct and if not what can we do?

We currently have 51 employees. We received a letter from the Inland Revenue last November saying that we had less than 50 employees. How do we go about the compulsory e-filing that I have read is required from us at the end of the current year?

We paid Statutory Maternity Pay to one of our employees four years ago. She has since left. The PAYE auditor now says that SMP wasn't due and we must repay to HM Revenue & Customs the reclaim we made. But we cannot recover the payment from our ex-employee and, in any event, had she not been paid by us she would have been due maternity benefit from the DWP. Why should we lose out? - this is so unfair.

We pay the school fees of our chairman's son. Now we have been asked to pay Class 1 arrears for the last six years. Surely this is a benefit in kind and only liable to Class 1A from April 2000?

My unquoted company has just issued preference shares to some employees. We have no employee benefit trust. These appear not to be 'readily convertible assets' and so there is no Class 1 NIC liability, is there?

My client sent an employee on temporary secondment to Switzerland in October 2002 and is applying the European Union rules. But I thought that there was a social security agreement with Switzerland. What should I advise him?

I am a sub-postmaster with Post Office salary of around £20,000. NICO say I have to pay Class 2 and Class 4 as well, even though the rest of the shop makes a loss. This is not fair. What can I do? Would it be better if my business was a limited company?

I have only one employee who earns £93 per week. There is no PAYE to deduct and no NIC to pay either, so I don't need to bother to complete a P14 and P35 every year, do I?

One of our directors had a married woman's reduced rate certificate. She gave this up last month. Next month she will become contracted-out. How do I calculate NICs under the annual earnings period?

One of our engineers is going to Belgium two days a week to work on a new contract that we have just won. Should he (or we) be paying Belgian social security contributions?

We were due to pay our directors bonuses at the end of this month. But one of the directors died in a road accident a week before. What is the NIC position?   

Office 4, Knights Farm

Newton Road

Rushden

Northamptonshire

NN10 0SX

Phone/Fax: 01933 411941

E-mail: mail@niconsultancy.co.uk

Member of the Institute of Chartered Accountants in England and Wales

Updated 1/11/2005