NIC Refunds for Vocational Training

Newsletter issue - November 2012.

Does your business engage self-employed teachers, lecturers or vocational instructors, or are you such a self-employed teacher or instructor? The NI contribution regulations were changed from 6 April 2012 to make it clear that such teachers/instructors should not be treated as employed and subject to class 1 NICs, where they were engaged on self-employed contracts.

However, for years prior to 6 April 2012 the Taxman demanded payment of Class 1 NICs from organisations who engaged self-employed vocational instructors whose self-employed status was not in dispute. Now the Taxman has admitted the NIC regulations in place before April 2012 did not apply to those who provided vocational or recreational training (as opposed to more formal education).

Consequently Class 1 NICs were paid by the engagers and trainers prior to 6 April 2012 when those contributions were not due. The type of instructors affected include: first-aid trainers, vocational and recreational trainers. These individuals and the organisations which engaged them, can now claim a refund of the Class 1 NICs which have been paid in error.

The refund of Class 1 NICs can only apply to educators who were engaged on a self-employed basis. Also the Taxman will only refund contributions made for the last two tax years (2010/11 and 2011/12), or for years where the Taxman's decision was requested or challenged, and that decision has not been determined. We can help you draw-up the refund claim.