Payroll for female employees paying a lower rate of National Insurance

How to process National Insurance for female employees with a ‘Certificate of Election’ form

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s National Insurance rules that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

What is a ‘Certificate of Election’?

Until 1977, married women were entitled to elect to pay a lower rate of National Insurance, although this did mean that they would have a lesser entitlement to certain contribution-based benefits such as the State Pension. If you are an employer and you are given a ‘Certificate of Election’ form by a female employee, this means that she opted into this scheme before it was closed and she can therefore continue to pay a reduced rate of National Insurance.

As an employer, you can check whether your employee is entitled to pay this reduced rate of National Insurance by checking the form that she gives to you. HMRC will allow you to accept one of the following forms:

  • CA4139

  • CF383

  • CF380A (if your employer has worked for you continuously since 5th April 1980)

If your employee doesn’t have one of these relevant forms, she needs to apply for one from HMRC by sending them either a completed CF9 form (if she is married) or CF9A form (if she is a widow). HMRC will then send her the required certificate so you are able to check her entitlement.

What are the relevant National Insurance categories?

If your employee is entitled to pay a reduced rate of National Insurance because she opted into this scheme, you will need to use the correct National Insurance category letter in her payroll records. The usual category letter is ‘B’, unless she is a member of a contracted-out workplace pension scheme run by your company, in which case you should use the category letter ‘E’.

What if the employee is no longer entitled to claim this reduction?

Your employee must tell you if she gives up or loses the right to pay less National Insurance. This might be because she has got divorced or she isn’t earning above the Lower Earnings Limit, which is currently set at £113 per week.

If her husband dies she may be able to keep her right to pay reduced National Insurance contributions for a certain time afterwards but she must call the National Insurance helpline for guidance on this matter. She can contact them by calling 0300 200 3500 (textphone: 0300 200 3519).

If your employee is no longer entitled to claim this reduction (or she gives up her right to claim it), as an employer you must:

  • Complete part 2 of the Certificate of Election form and return the certificate to your employee.

  • Change their National Insurance category letter in their payroll record – this will usually be to ‘A’ or ‘D’.

  • Include these details in your next Full Payment Submission to HMRC, showing year-to-date totals for both category letters.

Your employee needs to make sure that she:

  • Completes part 1 of the Certificate of Election form and returns it to the National Insurance office at HMRC.

  • Completes and sends either a CF9 form (if she is married) or CF9A (if she is a widow).

The address to send these forms to is:

National Insurance Contributions and Employers Office

HM Revenue and Customs

BX9 1AN

How can DSR Tax Claims help?

We know that working out your employee’s National Insurance entitlement can be a complicated affair, even with our helpful guide to tell you everything you might need to know. It’s all very well reading about it and knowing what HMRC’s stand on it is – but how do you apply that to your employee’s circumstances? It can seem like an absolute minefield but help is always available and you don’t need to battle through this alone. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

This page was last updated on 25/10/2018.

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