Home > Publications > Selected cases — Parliamentary > Selected Cases and Summaries of Completed Investigations - May - September 1998 > C.607/96
First Report Session 1998-99
Volume 3 - 1st Report - Session 1998-99
DEPARTMENT OF SOCIAL SECURITY
Delay in refunding employers' national insurance contributions
Matters considered:
A company complained that the Contributions Agency (CA) had paid insufficient compensation for their delay in refunding employers' national insurance contributions (NICs) which the company had paid.
Summary of case
On 17 July 1992, after a ruling by the Inland Revenue, the company applied to CA for a refund of employers' Class 1 NICs paid in the tax years 1989/90, 1990/91 and 1991/92. On 27 October CA accepted the ruling and decided that a refund was due. They made the refund totalling £401,432.39 in three instalments on 17 February, 17 August, and 21 November 1994. The company asked for interest on the refunds. After at first refusing, CA sent the company an ex gratia payment of £3,925.50. The company were dissatisfied with the amount awarded.
Findings
CA took too long to reach a decision on the company's claim for interest on the refund of NICs and when they did so they failed properly to apply the rules of their special payments scheme, thereby substantially underpaying interest. I found that the company had incurred additional legal costs as a result of CA's maladministration.
Remedy
CA paid the company further interest of £12,963.04 plus compensation of £2,120.33 for the late payment of that sum. They made errors in calculating the payments resulting in an overpayment of £7,317.97. CA agreed to reimburse the company's additional legal costs to the extent that they exceeded the overpayment and also taking account of the failure to compensate the company for the original delay in awarding compensation. CA took steps to improve their staff's understanding and awareness of the special payments scheme and apologised for their poor performance.
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