NIM06140 - Class 1 NICs : Expenses and allowances : Relocation allowances : Employees who have not paid NICs on relocation expenses paid prior to 6 April 1998

As explained in NIM06115 legal advice indicated in 1997 that relocation allowances are earnings for NICs purposes and that NICs should have been paid since 6 April 1975.

The misinterpretation of the law will mean that some people who received relocation allowances before 1998 but did not pay NICs on them may have missed out on contributory benefit entitlement. If the allowances had been included in earnings they might have been liable to pay primary NICs on them and the extra primary NICs might have made the difference between qualifying for benefit or additional amounts of benefit.

On 16 March 1998 a Press Release was issued by the then Contributions Agency inviting individuals who thought they might have been adversely affected to contact the Agency for advice. If a contact is made you must take action to investigate the position and deem contributions as appropriate. (Contact Cross-Cutting Policy for guidance on deeming of contributions.) NICs should be posted as employee-only contributions and treated as timeously paid.

You will need to handle any queries which are received with discretion. You should resolve them as best you can on the basis of the facts and information provided by the individual and supported by whatever evidence is available (payslips, for example). Generally, do not contact the employer or former employer except as a last resort and only then if it is reasonable to do so.

It would be reasonable to contact a person’s current employer, especially if the allowances were paid in recent years. It would not be reasonable to contact a former employer about allowances paid in 1976/77.