My client company has just been the subject of a PAYE review. This passed without incident other than that the officer noticed that the company has been paying personal pension premiums on behalf of one of the employees. I have now received a letter from the Inland Revenue advising me that Class 1 NICs are considered to be chargeable on these amounts and this adds up to a not inconsiderable amount.
My client company has just been the subject of a PAYE review. This passed without incident other than that the officer noticed that the company has been paying personal pension premiums on behalf of one of the employees. I have now received a letter from the Inland Revenue advising me that Class 1 NICs are considered to be chargeable on these amounts and this adds up to a not inconsiderable amount.
I was sure that Class 1 was not payable, but in the face of an apparently certain letter from the Revenue I am now having doubts. Before I become embroiled in correspondence with the Revenue in this regard, are readers able to reassure me on this point and give advice as to how I can rebut this argument? Or am I wrong?
The seeds of doubt have started because I understand that an employee's contributions into a company pension scheme are subject to Class 1 NICs and I am left wondering, if that is the case, why contributions into a personal scheme should not be so subject.
(Query T16,565)
