National Insurance FAQs
How do I obtain 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 01624 685077 or 01624 685078 once they have reached age 16.
Otherwise a person can obtain form CA5400 Application for a National Insurance Number by contacting us by telephone on 01624 685077 or 01624 685078. 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.
Will I have to pay National Insurance contributions while I am an employee?
Yes, 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.
Will I have to pay National Insurance contributions while I am self-employed?
Yes, 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.
What type or types of National Insurance contributions will I have to pay while I am self-employed?
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.
How do I pay my 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.
I am thinking about moving from the UK to the Isle of Man, how will my National Insurance record be affected if I move?
The payment of Classes 1, 2 and 3 National Insurance contributions give rise to entitlement to certain contributory Social Security Benefits. Any contributions paid in the Isle of Man will count towards entitlement to benefits in the UK in the same way as they would in the Isle of Man (and vice versa). This is despite the fact that the rates of contributions payable are sometimes different in the two countries. You only have one National Insurance record for use in both countries, so any contributions paid in the Isle of Man or the UK will be recorded on that one record.
What happens if I go to work or live 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 Forecast to review your status and options will help you. Contact ‘Pensions Forecasting’ at the Social Security Division (Markwell House) on telephone number +44 1624 685432 or by email to firstname.lastname@example.org
I employ individuals in the UK am I required to deduct NIC?
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 entitlement to certain benefits in either country, for more information on entitlements to benefits please visit the Social Security Division's website.
What should an employer do if they have not paid the correct amount of NIC?
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.Source: www.gov.im