Low earners and NI

greenglide

I had never thought of that but it does make sense. It is many a year now since I did payroll systems.

It has never been mentioned before in similar threads, so far as I am aware though?

zagfles

greenglide wrote: »

I had never thought of that but it does make sense. It is many a year now since I did payroll systems.

It has never been mentioned before in similar threads, so far as I am aware though?

I've mentioned it before. Slight correction to my post above, it's the UEL not UAP - UAP is for S2P.

See the definition of "qualifying earnings" here:

http://researchbriefings.files.parliament.uk/documents/SN03111/SN03111.pdf

bigfreddiel

zagfles wrote: »

Yes it does make a difference, as earnings above the UEL don't count. The UEL is £815 this tax year, £827 next.

So if you earned £6000 in one week or month, then only £815 of it would count, or about £3532 if monthly pay. So that alone wouldn't make a qualifying year.

ETA: UEL not UAP

Okay this all makes good sense, so if you earned say £8,270 over ten weeks, then each week would qualify, and you need £8,050 or so to make it a complete qualifying year. So that would do.

My reasoning so far is to see if the NI Admin people could tell in real time when anyone had fulfilled their payments for a qualifying year. So there would be no need to wait till the end of the financial year to tell you if you had accrued a qualifying year.

The reason I was wondering about this was because on the SP forecast web app it says it can't tell you what you may be getting till the end of the financial year. I think they could easily tell judging by the answers I've been given by others here, thanks everyone, fj

greenglide

I very much doubt that would be possible.

The IT that handles all the contributions is still very much the NIRS2 system that has been around since the late 90s event though it is referred to as NPS these days.

There has never been an all year round link feeding contributions data from NPS to NIRS2 apart from at the year end - it is of no value and could introduce immense problems.

At present, until April, there is more than just the binary is / is not a qualifying year as the data, at the year end, is used to update the AP, COD and GMP data. Data half way through the year doesn't do that.

The employer may revise the data supplied to HMRC if they find an error, do you think they want to make the year non qualifying again.

Massive complexities with absolutely no benefit. Why should HMRC bother?

SnowMan

zagfles wrote: »

Yes it does make a difference, as earnings above the UEL don't count. The UEL is £815 this tax year, £827 next.

So if you earned £6000 in one week or month, then only £815 of it would count, or about £3532 if monthly pay. So that alone wouldn't make a qualifying year.

ETA: UEL not UAP

Yes, historically that has always been the case that earnings above the Upper Earnings Limit in any pay period are ignored.

When employee national insurance contributions started to apply above the upper earnings limit (currently 2%) then there was a possibility they could have sneaked in some sort of allowance for earnings above the UEL, but I've never seen any mention of this, so unless anybody knows otherwise I am assuming it is still just earnings up to the UEL (about £42,385pa for 2015/2016) that count.

greenglide

I am assuming it is still just earnings up to the UEL (about £42,385pa for 2015/2016) that count.

On the P60 they get:-

Earnings at the LEL (where earnings are equal to or exceed the LEL)

Earnings above the LEL up to and including the PrimaryThreshold (PT)

Earnings above the PT, up to and including the UAP

Earnings above the UAP, up to and including the UEL

as well as the actual contributions paid. So they dont get anything past the upper earnings limit so they couldnt do that without getting more data.

bigfreddiel

greenglide wrote: »

I very much doubt that would be possible.

The IT that handles all the contributions is still very much the NIRS2 system that has been around since the late 90s event though it is referred to as NPS these days.

There has never been an all year round link feeding contributions data from NPS to NIRS2 apart from at the year end - it is of no value and could introduce immense problems.

At present, until April, there is more than just the binary is / is not a qualifying year as the data, at the year end, is used to update the AP, COD and GMP data. Data half way through the year doesn't do that.

The employer may revise the data supplied to HMRC if they find an error, do you think they want to make the year non qualifying again.

Massive complexities with absolutely no benefit. Why should HMRC bother?

I suspected that this would be the reaso, and I bet it's all written in COBOL! And I further surmise they have halls full of ancient IBM or ICL mainframes!

Cheers fj