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Tax Deducted but no N.I.

Tax Deducted but no N.I.

Has anyone come across companies/organisations, particularly in the education sector, that deduct tax at the standard rate from the contractor/employee but not national insurance?

I've got an example of this from a well known organisation who take tax at the standard rate and issue a quasi P60 at the year end which they say is "not a tax certificate" - they do quote what looks like a PAYE reference number.

I've no problem in entering the numbers on an employment supplement and the client has sufficient other income to maintain minimum figures for state pension but this is a new one on me.

Tom Egerton


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22nd Apr 2009 13:18

Agree with last line of Barry's post, except that very recently we have received normal PAYE codes for actor clients for both theatre & TV work where previously only NI (Class 1) would be deducted.

Previously these earnings have been treated as self employment for tax & employment for NI. Is anyone aware of a change of policy being announced by HMRC?

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By bashaw
22nd Apr 2009 11:22

Quite common
We complete tax returns for a number or self employed music teachers. About 5 years ago the various colleges and school that they worked for, insisted that they were paid thru' PAYE. However, for some reason, which we never got to the bottom of, NI was never deducted, even when the client was significantly over the NI limits.

We simply include the income and tax deducted on the Employment Pages and claim any allowable expenses in the usual way with their Self-employment.

Never had any querie from HMRC.

And for actors etc, they are generally paid thru PAYE - but this time in revere - with NI deducted but no tax deduction!

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17th Apr 2009 17:17

Thanks Simon
That's great.

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17th Apr 2009 12:01

Thanks Folks
No, he's well shy of 65.

Looks plain wrong to me and I'm just surprised at the size of the organisation concerned. They do say that "those who can, do and those who can't, teach".

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By Anonymous
17th Apr 2009 11:50

Employed & Self Employed
Those in the entertainment industry sometimes have NI deducted from their "salaries" but are NT code. If I recall, some ruling in the 80s meant that they were employed for NI but self employed for income tax. It's a long shot.

Maybe they are not employed at all, but the organisations deduct tax to cover themselves in the event of a status enquiry. Just stick the tax deducted on the self employed box on the TR.

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17th Apr 2009 14:54

Special Arrangement
If these are examining fees there are special arrangements - see HMRC manual EP8501.

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17th Apr 2009 09:32

Over 65 ?
Could the person in question be over 65 ?

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