The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004

12.  For regulation 52 M1 substitute—

“Return of contributions paid in error

52.— (1) This regulation applies if a contribution other than a Class 4 contribution has been paid in error.

This regulation is subject to regulations 51 and 57.

(2) If this regulation applies, an application may be made to the Board for the return of the contribution paid in error.

(3) An application under paragraph (2) shall be made to the Board—

(a) in writing, or in such form and by such means of electronic communications as are approved; and

(b) within the time permitted by paragraph (8).

(4) On the making of an application under paragraph (2) the Board shall return the contribution paid in error.

This is subject to paragraphs (5) and (6).

(5) Paragraph (4) does not require the return of contributions unless the amount to be returned exceeds—

(a) in the case of Class 1 contributions, 1/15 of a contribution at the main primary percentage payable on earnings at the upper earnings limit in respect of primary Class 1 contributions prescribed in regulation 10 for the last or only year in respect of which the contributions were paid; or

(b) in the case of a Class 1A or Class 1B contribution, 50 pence.

(6) Paragraph (4) does not require the return of a primary Class 1 contribution which is treated as properly paid by regulation 3 of the Social Security (Additional Pension) (Contributions Paid in Error) Regulations 1996 M2 .

(7) Contributions paid by a secondary contributor on behalf of any person in error—

(a) if they are not recovered from that person by the secondary contributor, may be returned to the secondary contributor; and

(b) if they are recovered by the secondary contributor from that person may be returned—

(i) to that person; or

(ii) with that person’s consent given in writing or in such form and by such means of electronic communications as may be approved, to the secondary contributor.

(8) An application for the return of any contribution paid in error shall be made within the period of six years from the end of the year in which the contribution was due to be paid.

This is subject to the following qualification.

If the application is made after the end of that period, an officer of the Board shall admit it if satisfied that—

(a) the person making the application had reasonable excuse for not making the application within that period; and

(b) the application was made without unreasonable delay after the excuse had ceased.

(9) In this regulation “error” means, and means only, an error which—

(a) is made at the time of the payment; and

(b) relates to some past or present matter.

Return of contributions paid in excess of maxima prescribed in regulation 21

52A.— (1) This regulation applies if there has been a payment of contributions in excess of the maximum determined in accordance with regulation 21 (annual maxima for those with more than one employment) in the particular case.

This regulation is subject to regulations 51, 52 and 57.

(2) If this regulation applies, an application may be made to the Board, in writing or in such form and by such means of electronic communications as may be approved for the return of so much of the payment of contributions as exceeds the maximum determined in accordance with regulation 21 in the particular case.

(3) On the making of an application under paragraph (2) the Board shall, subject to the following provisions of this regulation, return so much of the payment of contributions as exceeds the maximum determined in accordance with regulation 21 in the particular case.

(4) Paragraph (3) does not require the return of—

(a) a payment of Class 1 or Class 2 contributions unless the amount to be returned exceeds 1/15 of a contribution at the primary percentage payable on earnings at the upper-earnings limit in respect of main primary Class 1 contributions prescribed in regulation 10 for the last or only year in respect of which the contributions were paid;

(b) a primary Class 1 contribution to which regulation 3 of the Social Security (Additional Pension) (Contributions Paid in Error) Regulations 1996 (purposes for which primary Class 1 contributions paid in error are to be treated as properly paid) applies.

(5) Contributions to which this regulation applies shall be returned in the following order—

(a) primary Class 1 contributions at the reduced rate;

(b) Class 2 contributions;

(c) primary Class 1 contributions at the main primary percentage;

(d) any amount of primary Class 1 contributions reduced in accordance with section 41(1) and (1A) of the Pensions Act M3 in respect of COSRS employment;

(e) any amount of primary Class 1 contributions reduced in accordance with section 42A(1) and (2) of the Pensions Act M4 in respect of COMPS employment.

(6) The amount to be refunded is determined in accordance with the following Rules.

In this paragraph—

“a valid personal pension notice” means a notice given under subsection (1) of section 44 of the Pensions Act (approved personal pension arrangements) M5 which has not been rejected by the Board;

“an APP employment” means an employment in respect of which a valid personal pension notice has been given; and

“UEL” means the upper earnings limit for the year in respect of which the contributions were due to be paid and “PT” means the primary threshold for that year.

Rule 1 applies where none of the employments is contracted-out.

Rule 2 applies where at least one employment is contracted-out and no valid personal pension notice has been given in respect of another employment.

Rule 3 applies where at least one of the employments is contracted-out and a valid personal pension notice has been given in respect of another employment.

Rule 1

The amount to be returned is the excess of the contributions actually paid by the earner over the maximum prescribed by regulation 21 in the particular case.

Rule 2

If the amount of contributions paid in respect of contracted-out employments exceed the amount found by the following formula, the amount to be returned is the excess.

The formula is—

53 × (UEL – PT) × 9.4%.

In any other case to which this Rule applies take the following Steps: the amount to be returned is the excess of the contributions actually paid by the earner over the amount found by Step 5 in the following sequence.

Step 1

Determine the amount of earnings between PT and UEL in respect of contracted-out employments held in the year.

Step 2

Multiply the amount found by Step 1 by 9.4%.

Step 3

Subtract the amount found by Step 1 from that found by the formula—

53 × (UEL – PT).

Step 4

Multiply the result produced by Step 3 by 11%.

Step 5

Add together the results of Steps 2 and 4.

Rule 3

If the amount of contributions paid in respect of APP employments exceeds the amount produced by the formula below, the amount to be refunded is the excess.

The formula is—

53 × (UEL – PT) × 11%.

In any other case to which this Rule applies take the following Steps: the amount to be returned is the excess of the contributions actually paid by the earner over the amount found by Step 5 in the following sequence.

Step 1

Determine the amount of earnings between PT and UEL in respect of APP employments held in the year.

Step 2

Multiply the amount found by Step 1 by 11%.

Step 3

Subtract the amount found by Step 1 from that found by the formula—

53 × (UEL – PT) .

Step 4

Multiply the result produced by Step 3 by 9.4%.

Step 5

Add together the results of Steps 2 and 4.

(7) From the amount otherwise falling to be returned under Rule 2 or Rule 3 in paragraph (6) there shall be deducted so much of any payment of contributions as is attributable to the application of Steps Five and Seven in regulation 2 1(2).

(8) If—

(a) an application has been made under paragraph (2) for the return of contributions in excess of the amount specified in regulation 21, and

(b) the Board have been given notice under section 44(1) of the Pensions Act and have not rejected it,

the contributions shall be returned in the order specified in paragraph (5) save that the contributions specified in sub-paragraph (c) shall be returned after those in sub-paragraphs (d) and (e).

(9) Contributions paid by a secondary contributor on behalf of any person in excess of the amount specified in regulation 21—

(a) if they are not recovered from that person by the secondary contributor, may be returned to the secondary contributor; and

(b) if they are recovered by the secondary contributor from that person may be returned—

(i) to that person; or

(ii) with that person's consent given in writing or in such form and by such means of electronic communications as may be approved, to the secondary contributor.”.

Marginal Citations

M1 Regulation 52 was substituted by regulation 8 of S.I. 2002/2366.

M2 S.I. 1996/1245: regulation 3 was amended by Schedule 2 to the Transfer Act.

M3 I.e. the Pension Schemes Act 1993 (see regulation 1(2) of the principal Regulations). Section 41 has been amended by paragraph 127 of Schedule 7 to the 1998 Act, paragraph 6 of Schedule 9 to the Welfare Reform Act and paragraph 36 of Schedule 1 to the 2002 Act.

M4 Section 42A was inserted by section 137(5) of the Pensions Act 1995 (c. 26) and subsections (1) and (2) were substituted by paragraph 128 of Schedule 7 to the Social Security Act 1995 and paragraph 7 of Part 2 of Schedule 9 to the Welfare Reform Act.

M5 Section 44(1) has been amended section 164 of the Pensions Act 1995 and paragraph 48 of Schedule 1 to the Transfer Act.