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Q: What can be done to minimise the problem of missing NI numbers?
A: Most employers have difficulty in obtaining a National Insurance (NI) number for every employee. Some new employees are just very lax in providing their number. It can take months for an employee from outside the UK to obtain an NI number. In an organisation with many sites, demands from a centralised payroll office for NI numbers for new employees may go unheeded.
There is no statutory requirement for an employer to hold an NI number for every employee. The Social Security Contributions and Benefits Act 1992 (Schedule 1, paragraph 7A) provides for Regulations to be made that would penalise employers for negligently failing to provide NI numbers.
However, no Regulations have been made under those provisions and, as confirmed in Tax Bulletin 46 (April 2000), HMRC would prefer to handle the causes of missing and inaccurate NI numbers through education rather than penalties. Even if Regulations were made in the future, HMRC’s commitment is that breaches would be handled by educational visits to offending employers to resolve the difficulty before any penalties were imposed.
However, HMRC certainly expects employers to obtain the numbers and quote them on all tax and NI forms and correspondence. It is clearly in the interests of employees for their NI number to be quoted on their P14 End of Year Summary as it ensures that their contribution record is kept up-to-date. HMRC has put procedures in place to help employers trace missing numbers and these are set out in Revenue booklet E13, on pages 24 and 25.
If a new employee does not provide an NI number and the P45 does not show one, the employer should record the employee’s name, address, date of birth and gender. The last two items of information must be quoted on a P14 in the absence of an NI number. Employees who have never had an NI number should be directed to the local Jobcentre Plus for an interview. At the interview, form CA5400 will be completed and the employee should retain the front cover and give it to the employer to show that a number has been applied for.
If a P46 has been sent to the employer’s tax office with no NI number entered, no further action is needed as the number will be traced automatically. If HMRC cannot find the number, the employee may be contacted direct for further information. When the number has been found, the employer and employee will be informed on forms P46-5 and P217 respectively.
If the employer is missing several NI numbers, or if the NI number held by the employer differs from the one being used by HMRC, the tracing form CA6855 can be used. This can be ordered from the Employer’s Orderline, or downloaded from HMRC’s website, or printed out from the Employer’s CD-ROM. Details for up to 6 employees can be entered on one form, which is then sent to the address on the form. Alternatively, a computerised schedule can be used, listing the same information as is required on form CA6855. When the numbers have been traced, they are written on the CA6855 or schedule and returned to the employer.
A larger scale checking service is available to Occupational Pension Scheme Authorities and to computer bureaux or agents. This free service allows enquiries to be made using paper schedules, magnetic tape or flexible disk. The checks may not be performed more frequently than three years. Details of the scheme are provided in manual CA21 Using the National Insurance Number / Date of Birth Checking Service. See http://www.hmrc.gov.uk/newemployers/iwttrace-a-nino.shtml
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