Universal credit and earned income - pension contribution deduction from UC

NedS

cybertortoise said:

Hi @NedS that's what I thought. But I didn't understand how UC could know all of my deductions to the penny, yet my NICs are being treated as income. 

I do have a personal tax account and can see the income tax and NI paid on each month during this tax year. 

The amounts reported by my employer are correct in so far as I can see. The personal tax account shows taxable pay, tax paid, and NI. All are correct. Except in the totals row at the bottom, NI paid says zero despite showing payments of £527.15 since April 2025. 

It says underneath the table "Your employer sent the individual and total amounts in the table above.The individual amounts do not add up to the total. When this happens we use the total amounts as your figures for the tax year."

And checking back on previous years the totals are zero for NI paid despite showing every monthly payment in that column. Yet my NI record for the 2024/25 tax year says full contributions and I paid £1437.29 - so they know my NI has been paid! 

It sounds like your NICs are being reported incorrectly by your employer to HMRC as zero, and UC then thinks you've paid £0 NIC, hence why the NI that you have actually paid is not being deducted.

You need to raise an RTI dispute with UC. They will raise it with HMRC for you, who will contact the employer to clarify the situation. Ultimately, you will likely need to raise an RTI dispute every AP until the employer resolves the situation and reports the correct numbers in the correct columns. HMRC (and UC) can only act on what the employer reports, and it is their responsibility to report accurately and on time.

These kind of administrative mistakes often only come to light when someone makes a claim for UC, and their reported earnings are not what they should be, and employers often have no clue they are not reporting correctly. Do you have other colleagues at work who claim UC, and are their claims similarly affected, or is the employer only getting it wrong for you [rhetorical - just something for you to consider]

cybertortoise

@NedS this was on my mind too. I work for an NHS foundation trust with 1000s of staff, if it's happened once I think it is pretty likely for it to have happened to someone else too. 

I have spoken to our payroll team and he has logged a support ticket so hopefully they'll be able to figure it out on their end. I had a different contract with the same employer before starting full time, the NI was being reported correctly on that one. It's just the current contract, plus the additional bank contract added at the same time, that are not.

NedS

cybertortoise said:

@NedS this was on my mind too. I work for an NHS foundation trust with 1000s of staff, if it's happened once I think it is pretty likely for it to have happened to someone else too. 

I have spoken to our payroll team and he has logged a support ticket so hopefully they'll be able to figure it out on their end. I had a different contract with the same employer before starting full time, the NI was being reported correctly on that one. It's just the current contract, plus the additional bank contract added at the same time, that are not.

Yes, payroll may think they are doing everything correctly. UC has a habit of exposing things, and I've seen all sorts come up on RTI disputes. As I said, you'll need to raise an RTI dispute and tell/show the jobcentre what you've discovered so far about your NI not being reported correctly. HMRC should then contact the employer too, and may even be able to help them correct the issue (assuming we are correct in our hypothesis).

cybertortoise

Quick update: I contacted my payroll provider and raised a support ticket. They marked it as resolved this morning and said this is a known issue with HMRC, basically ask HMRC to remove my initial contract with them and make sure my current contract is the main one. Also told me to submit payslips to UC showing the NICs. 

Unfortunately this has resolved nothing. UC know what my NI deductions are, so that info is going across as it should, showing payslips is meaningless when they have that info. Then I called HMRC and he said its already got my current contract as my main one, the old one was closed in May when I finally got my P45. And all the figures HMRC have are coming directly from my payroll provider. I have reopened the support ticket and told them the update.

NedS

cybertortoise said:

Quick update: I contacted my payroll provider and raised a support ticket. They marked it as resolved this morning and said this is a known issue with HMRC, basically ask HMRC to remove my initial contract with them and make sure my current contract is the main one. Also told me to submit payslips to UC showing the NICs. 

Unfortunately this has resolved nothing. UC know what my NI deductions are, so that info is going across as it should, showing payslips is meaningless when they have that info. Then I called HMRC and he said its already got my current contract as my main one, the old one was closed in May when I finally got my P45. And all the figures HMRC have are coming directly from my payroll provider. I have reopened the support ticket and told them the update.

Ah, the bounce around where each says it's the other's fault. I can't help advise with that as I don't know enough to know whether HMRC or the employer may be at fault, or a combination thereof.

In the meantime, what you can do is ask UC to raise an RTI dispute for each affected AP, and get the NI conts properly deducted.

Unfortunately you/UC will need to keep doing that until HMRC and/or the employer sort the issue such that the data is reported to UC correctly.

cybertortoise

I'm still getting nowhere with this. HMRC says it's payroll, payroll says it's a known issue with HMRC. And UC says they can do nothing to help me unless HMRC sends new figures through.

NedS

Did you request an RTI dispute is raised, and what was the outcome of that?

cybertortoise

Yes, they raised a dispute on 21st August according to the advisor on my UC journal. Then on the 4th a different advisor said they were raising it with the 'technical team'. So I'm not sure which date it was actually done, or if those are different things. No response or contact since. I called today and they've escalated it. They said I should be called by 6pm tomorrow. 

I went back to payroll and they said it's a known issue with HMRC and HMRC know about it, payroll are reporting correctly so there's literally nothing that they can do to fix it. It's impossible to get through to anyone at HMRC except National Insurance and they are happy everything is being reported correctly. 

NedS

cybertortoise said:

Yes, they raised a dispute on 21st August according to the advisor on my UC journal. Then on the 4th a different advisor said they were raising it with the 'technical team'. So I'm not sure which date it was actually done, or if those are different things. No response or contact since. I called today and they've escalated it. They said I should be called by 6pm tomorrow. 

I went back to payroll and they said it's a known issue with HMRC and HMRC know about it, payroll are reporting correctly so there's literally nothing that they can do to fix it. It's impossible to get through to anyone at HMRC except National Insurance and they are happy everything is being reported correctly. 

Thank you for the update.

From a process point of view, there are two ways this is going to get fixed.

1. The automated way - whatever the issue is causing the data to be reported incorrectly is addressed and fixed, and then the system just works as intended. It doesn't sound like that will happen as long as parties involved just point the finger at others.

2. The manual way - you raise an RTI dispute for each affected AP, and they look at it, realise that your NI conts are not being treated as they should under the legislation, and manually adjust as required.

Option 2 seems more likely to give you the desired outcome at the moment but obviously is a lot more inconvenient for you.

Sometimes where there is an ongoing issue like this, which is obviously going to reoccur each AP, UC will make a decision once after an initial investigation of what has happened, and then accept that it will continue to happen every month so it then becomes easier (less hoops to jump through) to manually fix the issue in subsequent APs. So it's important to stress that this will be an ongoing issue that they will need to address EVERY AP. It will still take time each AP though (as it still needs to be escalated to a relatively high level to be fixed), the hoop they should be able to eliminate is the need for DWP to contact HMRC every month to find out what is going on, and just accept that the answer they received last AP still applies this AP.

Hope that makes sense.

cybertortoise

After another call this week it turns out neither of those disputes were actually raised when the advisors said they would be. The case manager has apologised and says she has raised it again, unfortunately she can't give me any timescale for completion.