Written by Paul Chappell
Published on December 3, 2020

The issue of wages being processed under an incorrect National Insurance number can be concerning for any organisation, and even more so for the affected employee with implications to their personal taxation.

At Dataplan for Charities this is an issue that we have encountered on several occasions due to mistaken NI numbers being supplied resulting in a misallocation of wage deductions. This leads to deductions such as NI, Income Tax and where applicable student loan repayments being placed alongside an incorrect employment record.

What to do if an incorrect NI number has been supplied

In the unfortunate case that this does happen, when we correct the National Insurance number stored in our payroll software this should automatically trigger the required NI reallocations on HMRC’s end.

However, the implications for Income Tax are a little bit trickier. These will require the affected employee to contact HMRC’s Taxes Helpline themselves and they will require their employer’s PAYE scheme and accounts office references to help HMRC process their request. They will need to explain that their payroll data has been processed with an incorrect NI number, and they must give HMRC the incorrect NI number that was supplied as well as they correct NI number that needs to be applied instead.

Upon doing this, the employee will be able to request reallocation of their relevant deductions, and the advisor should be able to ‘cleanse’ their records and reallocate all appropriate deductions to the correct NI number.

What about student loan deductions?

Student loan deductions can be corrected through HMRC, but it is important to ask the advisor when speaking to their Taxes Helpline that they arrange contact with the Student Loan Company to ensure that they also take action on their end.

Dealing with HMRC, tax and compliance issues can be a daunting task. This is why our team of experts is here to help you in any way possible, either dealing with HMRC on your behalf or providing advice and instruction to help you and your employees to do so.

Dataplan are one of the UK’s leading providers of specialist payroll and associated services.

From payroll outsourcing and pension service management to ePayslips and gender pay gap reporting; we have a solution for you and your business.