National Insurance Query

50Twuncle

How is NI calculated - if someone, normally earns, considerably less than £183 per week and, then receives a single weeks pay of considerably over £183 ?

Would NI be paid on that single weeks salary ?

If not - how would this overpayment be refunded - if the (former) employer refuses to help ?

Dazed_and_C0nfused

NI is calculated per pay day.

So a single week earning more than normal could result in NI being deducted.

That NI is not repayable unless there was a mistake however that is likely to be very very rare.

50Twuncle

So -  if someone had had NI deducted as a one off "mistake" from a larger than normal monthly salary payment - when their earnings from THAT employment during the tax year was considerably under the cut off (£12,500) and would not benefit by way of state pension because a single payment during the tax year makes no difference - how would they reclaim this overpayment ?

https://www.gov.uk/claim-national-insurance-refund/y/class-1 implies that it is the responsibility of the employer - but the employer gives the excuse that the employee is no longer on the "books" so cannot be refunded

Similarly Income Tax  - for the same reason ?

Dazed_and_C0nfused

As NIC is calculated per pay day, not on a cumulative basic like tax, why was it a mistake?

You haven't said anything yet to suggest there has been a mistake.

Why do you think the NIC could be reclaimed?

Income tax and NI work in totally different ways.

molerat

The only time you are likely to be entitled to anything refunded is, if due to some error, you are paid for multiple usual pay periods at once and this causes you to pay NI when normally you would not.  A larger than normal pay packet due to, say, overtime or bonus does not entitle you to a refund.

50Twuncle

I was paid off from employment through a small settlement payment - I used to work part time with an income of less than £100 per week and was paid a lump sum - consisting of a free from deductions element and a small (sub £700) taxable element.

My total income from the job was less than £5000 even with the settlement payment -  but was still taxed at 20% on the taxable element (which I can claim back) and NI was removed at a rate of 12% - which I will not gain any state pension due to the fact that a single month makes no effect !

This was clearly an error but how exactly do I reclaim the incorrectly deducted contributions ?

mark55man

As I understand it you can't claim it back.  that's just the way it is.  So they are not incorrectly deducted, because the rules do not average your salary out.  That's just wishful thinking

50Twuncle

mark55man said:

As I understand it you can't claim it back.  that's just the way it is.  So they are not incorrectly deducted, because the rules do not average your salary out.  That's just wishful thinking

Https://www.gov.uk/claim-national-insurance-refund/y/class-1 says differently

molerat

50Twuncle said:

mark55man said:

As I understand it you can't claim it back.  that's just the way it is.  So they are not incorrectly deducted, because the rules do not average your salary out.  That's just wishful thinking

Https://www.gov.uk/claim-national-insurance-refund/y/class-1 says differently

That simply states there is a route for reclaiming an overpayment if you are eligible.  There is nothing in what you have written that shows you are eligible for a refund, in fact your clarification strengthens the case that you are not.

Nebulous2

National insurance works on a pay period if I remember correctly, not on a cumulative basis.

I had a friend who was weekly paid, and his shift pattern had him working a lot of hours on one week and very few on the other. In his week where he worked a lot of hours he was over the upper limit for NI, meaning he didn’t pay it on all his earnings, and in his week with very few hours he paid very little. Their company wanted to move to monthly pay, but the staff were very reluctant as it was going to cost them more in NI. 

p00hsticks

50Twuncle said:

NI was removed at a rate of 12% - which I will not gain any state pension due to the fact that a single month makes no effect !

This was clearly an error but how exactly do I reclaim the incorrectly deducted contributions ?

It's not 'clearly an error' - it's how the NI system works. Your pay for that week was more than the primary threshold of £183, and so your employer correctly deducted NI.  You can't claim it back.

The fact that you won't gain any state pension from it is neither here nor there - after all, there are plenty of people of working age around who have already obtained the maximum state pension requirement but need to continue paying if they have sufficient earnings.