National Insurance (Infotype 0069)

National Insurance (Infotype 0069)

Definition

This infotype stores an employee’s National Insurance (NI) information. The National Insurance number itself is transferred from the employee’s Personal Data (infotype 0002) record, and cannot be altered here.

Use

All the necessary information for National Insurance contribution (NIC) calculation is stored in this record. The Payroll Accounting component uses this data to make the correct NIC deductions from wages and salaries.

When new employees join your company, you need to create a National Insurance record for each of them. If you do not receive the National Insurance (NI) details immediately, you need not create this record for them until you receive the information. If the NI details are not available, the system uses the default values set up in Customizing for Payroll Accounting to calculate the employees’ NICs. For more information, see the section on National Insurance in the Implementation Guide (IMG) for Payroll: United Kingdom.

Creating a National Insurance record after employee data has been included in payroll accounting triggers Retroactive Accounting.

During their employment, employees’ NI situations may change. You need to create new records to reflect each of these changes.

If an employee’s National Insurance status changes, you must create a new National Insurance record valid from the exact date of the change of status. This is to ensure that the payroll calculates the new contributions from the correct period within the tax year.

In the case of underpayments, the arrears are recovered in accordance with the statutory regulations. Overpayments are refunded, and the cumulatives are corrected for end-of-year reporting.

You can also use this record to administer National Insurance holidays for your employees.

Structure

NI category

This enables the Payroll Accounting component to calculate the National Insurance Contributions for the employees and the employer.

Additional flags

In the Additional flags group box, you can set an indicator for the following:

The employee is a company director

The employee has another job and has provided you with a CA2700 exempting him or her from NICs

The employee pays NICs on a daily basis.

The payroll automatically calculates NICs on an annual basis for company directors, makes only the employer contributions for employees with CA2700s, and makes the correct deductions for seasonal workers paying NICs on a daily basis.

National Insurance holidays

If a new employee qualifies for an NI holiday and your company has chosen to take advantage of this incentive, you set the NIC holiday cert. indicator in the National Insurance holiday group box. In the Cert. received field, you enter the date from which the employee's NI holiday certificate is valid.

Employees who also belong to a recognized pension scheme make NICs at the contracted-out rate. The full rate for these employees can be claimed by setting the Recover not cont. out indicator in the National Insurance holiday group box.

The system automatically stops deducting the amount of NI holiday claimed for qualifying employees from your regular payments of NICs to the Inland Revenue in the following cases:

When a monthly-paid employee has received 12 payments

When a weekly-paid employee has been with your company for 52 weeks

If an employee for whom you are claiming an NI holiday leaves your company within 13 weeks of joining, the system automatically adjusts your company’s regular payments of NICs to the Inland Revenue.

Retroactive Accounting Implications

Backdated changes to the National Insurance Contributions (infotype 0069) record do trigger Retroactive Payroll Accounting.

See also:

Retroactive Accounting