National Insurance troubleshooting
Obtaining a National Insurance number
Where child benefit is being paid for a child resident on the Isle of Man a National Insurance number should be issued to the child at age 16 by post. If child benefit is not being paid for a child because the claimant's income is too high, the child can obtain form CA3499 Application for a National Insurance Number – Juvenile Registration by contacting us by telephone on +44 1624 685400 once they have reached age 16.
Otherwise a person can obtain form CA5400 Application for a National Insurance Number by contacting us. The person will be required to attend a 15 minute interview at which they must produce two forms of identification (ID), one of which must be photographic.
Lost/forgotten National Insurance numbers
Contact us by telephone on +44 1624 685400 and choose the option for National Insurance, you will be asked questions to confirm your identity before the National Insurance number is confirmed to you.
Paying National Insurance contributions while you are an employee
A person is liable to Class 1 employee’s National Insurance contributions unless their gross weekly or monthly earnings fall below the Lower Earnings Level (set yearly). See Rates and Thresholds for further details.
Paying National Insurance while self-employed
You will have to pay National Insurance contributions unless a person is granted an ‘Exception’ because their net profits from self-employment for a particular year are (or expected to be) under the Small Earnings Limit (set yearly). To request a Small Earnings Exception application form contact us by telephone on + 44 1624 685400.
Type of National Insurance contributions you will pay
Unless the self-employed profits are low a person will have to pay flat-rate Class 2 contributions on a monthly basis and earning-related Class 4 contributions, which are based on net profits from self-employment in the relevant tax year.
Paying your Class 2 and Class 4 National Insurance contributions
A person can choose the method by which they wish to pay their Class 2 contributions by completing form CWF1/R133 Notification of Self-Employment. Class 2 contributions are paid by making monthly payments. Class 4 contributions payable for the tax year are calculated and collected with Income Tax assessments.
Your National Insurance record when moving from the UK to the Isle of Man
The payment of Classes 1, 2 and 3 National Insurance contributions give rise to entitlement to certain contributory Social Security Benefits. Your National Insurance record will be held in the UK. If you move to the Isle of Man and begin paying National Insurance contributions (or receiving benefit credits) another record will be created for you in the Isle of Man using the same National Insurance number. These records are separate for pension purposes. However if a contributory benefit such as Jobseekers Allowance or Incapacity benefit is claimed, contributions paid in the UK may satisfy claim criteria here according to the UK/IOM reciprocal agreement.
Working or living abroad
If you are sent to work abroad by an Isle of Man or UK employer you may still be liable to pay National Insurance contributions in the Isle of Man. A person may be entitled to pay voluntary contributions if they wish to maintain their National Insurance record while abroad. In either instance we would suggest contacting us to discuss matters on telephone number + 44 1624 685400. The Social Security Division's webpage regarding Reciprocal Agreements with other countries may also be useful.
What is an RD170 letter?
The letter with reference ‘RD170’ is a courtesy letter informing a person they do not have a ‘qualifying’ year (for the year noted) with regards to entitlement to state pension and certain other benefits e.g. Jobseekers Allowance, Incapacity Benefit. It is not a request for money, it is a courtesy letter so the person may take action regarding their National Insurance contribution record if they wish to. For the National Insurance staff at the Income Tax Division it highlights problems where National Insurance has been deducted from individuals by employers but not been allocated to their record. It helps to keep our records up to date and prompts individuals to consider their National Insurance record and plan for future entitlement to state pension. Currently 30 ‘qualifying’ years are required on your record to gain full entitlement to the basic state pension. If you are unsure of your current entitlement to state retirement benefits, a Pension Statement will enable you to review your status and options.
Contact: Pension Statements at the Income Tax Division on telephone number +44 1624 685432 or by email to email@example.com
Deducting National Insurance on employee in the UK
National Insurance agreement with the UK
The Isle of Man has a long standing reciprocal agreement with the United Kingdom which means that the circumstances that give rise to a National Insurance contributions liability apply equally to employers and employees resident or having a place of business in the UK as they do to employers and employees resident or having a place of business in the Isle of Man.
Employers in the Isle of Man are therefore liable to pay employer National Insurance Contributions in respect of their employees living and working in the United Kingdom and the reverse is also applicable.
National Insurance contributions paid in either the United Kingdom or the Isle of Man can count towards a person's entitlement to certain benefits in either country, for more information on entitlements to benefits please visit the Social Security Division's website.
Underpayment / overpayment of National Insurance
Where an employer has underpaid NIC they will be liable to pay any amount outstanding including any NIC that would have been due from the employee. However there are special rules which enable the employer to recover the employee’s NIC for the current and previous year.
Where an employer has overpaid NIC they should refund the overpayment back to the employee during the next pay period and reduce the amount of NIC that they pay to Treasury by that amount.
Mistake discovered after the tax year has ended
If, after the tax year has ended, you discover that a mistake has been made in the amount of NICs deducted you should provide a revised T14 to the Income Tax Office with notification of the issue.