National Insurance contributions paid under threshold

fluffybunnyrabbits

Hi, I earn less than 12,570 however i pay national insurance because in schools, the pay increase is decided in November and back dated to April is paid in one month which triggers NI. Can I claim it back?

molerat

No. As the pay rise is not negotiated / agreed before the date it is implemented against you are not entitled to it until the actual payment is received so that is the date / amount that NI is set against. If the pay rise was agreed before the start of the year but paid late then the NI would be calculated against the date it was due.

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42265

fluffybunnyrabbits

thanks for the info. The local government support staff pay awards are announced on the on the 1st April but staff are informed November?

jackieblack

https://forums.moneysavingexpert.com/discussion/comment/81890454#Comment_81890454

Not really.

In broad terms, how it usually works in practice is, unions usually put forward their demands around Dec-Jan for the pay award due 1st April, employers ‘consider’ and come back with their offer around end Feb/March, unions spend next few months consulting members and eventually, usually mid/late summer, pay award is agreed at whatever was offered months ago.
It then takes a month or two for payroll providers to process the pay award which is backdated to 1st April (this can depend on when teachers pay award is agreed, this is due 1st September but is often agreed and implemented before support staff pay award) . The later in the year the pay award is implemented, the more months back dated pay award increase is owed, this then causes issues for anyone close to the NI threshold and also staff in receipt of Universal Credit. Some payroll providers allow the backpay to be split over 2 or 3 months which can help alleviate these issues but most don’t.

I’ve worked in a school 24 years and, because the pay award has often been agreed while schools are closed for the summer holidays, have found it’s mostly been received at some point during the Autumn term, any time between September and December.

sammyjammy

https://forums.moneysavingexpert.com/discussion/6655957/national-insurance-contributions-paid-under-threshold

£12,570 earnings is related to the payment of tax not National Insurance.

Marcon

£12,570 earnings is related to the payment of tax not National Insurance.

NI kicks in where an employee earns an annual salary at a consistent rate: £242 a week (£12,584 pa) or £1,048 a month (£12,576 pa), so the two aren't wholly unrelated.

chrisbur

I have not come across anything that would suggest that a refund is due nor anything that would definately confirm a refund is not due. You could claim a refund, details here….

https://www.gov.uk/claim-national-insurance-refund

….and see what HMRC have to say.