Business News
Tick-Tock of the NIC Time Bomb
MP, Ian Liddell-Grainger, chairman of the All Party Parliamentary Group on Taxation, has caused headaches at the HMRC by releasing figures of more than £1.2m in backlog of National Insurance Payments dating as far back as 2004-2005.
Some £9m National Insurance payments have not been credited to employees’ records, with the situation dubbed a “National Insurance time bomb” by Liddell-Grainger, with warnings of potential problems claiming pensions. Liddell-Grainger advised on BBC’s Radio 4 Today programme that those taxpayers whose NIC records had been mismatched would do well to source old payslips and clarify with their employers exactly what has been paid in these time periods.
Errors on the P14 forms, on which employers are required to submit to log PAYE and National Insurance Contributions for each employee in May of every year, has proved to be the source of the problem. Issues in the administrative role of the HRMC’s IT and PAYE departments, perhaps as a result of the rising workload from the National Insurance and Pensions System, have meant that errors such as employer information not matching on the forms have not had the care and attention required to prevent such a massive backlog.
David Gauke, Treasury Exchequer secretary issued the unmatched records and their monetary value dating back to 2004-2005 as follows:
| Tax Year | P14s Not Matched | Value |
| 2004-05 | 1,839,143 | £263.1m |
| 2005-06 | 2,016,761 | £289.2m |
| 2006-07 | 1,974,081 | £278.6m |
| 2007-08 | 1,947,065 | £258.6m |
| 2008-09 | 1,542,773 | £194.6m |
