National Insurance Refund

TrickyDicky101

Hi All

Request for a bit of maths help here:

I have received a refund cheque from HMRC for overpaid NIC for 2017-18. It's sizeable at £2852. Great! Except I don't think it is due me and I have actually paid pretty much the right amount of NIC in 2017-18 so am due no refund.

In total, I paid £5,793 (A) in 2017-18.

This was on two consecutive non-director employments earnings split as:

5 months @ £93k pa (split evenly over 12 months)
7 months @ £83.5k pa (split evenly over 12 months)

Using these figures I came up with an initial Employee NIC liability of c.£5.4k (B). In addition I had bonuses plus other taxable income from redundancy which I assume accounts for the difference between A and B above.

Could anyone please check my figures (on the employment earnings).

I have called the NIC helpline and explained I don't think I'm owed anything but I am not convinced that the person I was speaking to was capable of determining what the correct NIC due should have been.

I am not cashing the cheque and have asked for the amount to be confirmed.

agrinnall

I think you'll need to explain a bit more about 5 and 7 months earnings split evenly over 12 months - do you mean that in the first job you worked for 5 months but were actually paid the salary in monthly instalments over 12 months (and did that 12 month period coincide with the tax year)?


I don't think you've paid enough NI myself (which makes a refund even more bizarre). If you combine the salaries into an annual total then the NI due is just over £7,000. If you take them individually then it is £5380 + £5180, so well over £10,000 in total.


Edit: Just realised I missed the vital "pa" after the salary figures. So a quick calculation based on adding the two figures together and dividing by 2 gives a NI figure of around £5,300, which ties up with your figure. I can't see how a £2800 refund can be right.

TrickyDicky101

Thank you - apologies for any confusion. Yes, 5 months earning in total 93k * 5 /12 and then 7 months earning in total 83.5k * 7 / 12.

Well that sucks - I was hoping you'd tell me I was wrong and could go and blow the dosh at the races with a clear conscience

I think I am going to write to the office and set down my figures.

Thank you.

Sibbers123

It's probably to do with Annual Maxima rules.

You may have paid 12% NI on earnings between the primary threshold and the upper threshold on both jobs and as a result, may have paid to much NI in the year.

Without more information (payslips) it would be impossible to say for sure.

More information;
https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim01160

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim01163

[Deleted User]

agrinnall wrote: »

Edit: Just realised I missed the vital "pa" after the salary figures. So a quick calculation based on adding the two figures together and dividing by 2 gives a NI figure of around £5,300, which ties up with your figure. I can't see how a £2800 refund can be right.

I agree - we also need some idea what NIC was deducted from the bonuses or, indeed, the 'other taxable income from redundancy' ? Was it at 2% rate?

TrickyDicky101

The NIC calculator here:

http://nicecalculator.hmrc.gov.uk/Class1NICs1.aspx

was helpful. It essentially corroborates my estimates.