What happens if an employee does not have a National Insurance (NI) number?

We can still process payroll for employees without an NI number, but with important considerations:

• Legal processing: Payroll can be processed legally without an NI number, but the employee must apply for one as soon as possible.
• Required documentation: You must maintain comprehensive records including:
  • Full name and address
  • Date of birth and gender
  • Passport number or other ID documentation
  • Right to work verification
• HMRC reporting: We will report the employee on the Full Payment Submission (FPS) without an NI number, using their other identification details.
• NI contributions:
  • Contributions will still be deducted and recorded
  • These will be properly attributed once the NI number is obtained
  • HMRC will retroactively update their records to include past contributions
• Pension implications: Some pension providers require NI numbers for correct contribution calculations. Without an NI number, employee pension contributions may default to 5% instead of 4%.
• Action required: Instruct the employee to apply for an NI number immediately and provide it to us as soon as received. We will update their payroll record when the number is supplied.

HMRC does not issue temporary NI numbers, so using an incorrect or made-up number could cause significant complications for the employee's tax record.