NIC credits
People who are unable to work for some reason may be able to claim NIC credits (technically credited earnings, since 1987[6]). These are equivalent to Class 1 NICs, though are not paid for. They are granted either to maintain a contributions record while not working, or to those applying for benefits whose contribution record is only slightly short of the requirements for those benefits. In the latter case, they are unavailable to fill "gaps" in past years in contribution records for some benefits.
As indicated above, the rates at which an individual and their employer pay contributions depend on a number of factors. Consequently there are many possible sets of employer/employee contribution rates to allow for all combinations of the various factors. HMRC allocate a letter of the alphabet, referred to as an 'NI Table Letter', to each of these sets of contribution rates. The complexity of the system is such that 21 of the 26 letters of the alphabet are currently in use for this purpose. Each tax year, HMRC publish look-up tables for each table letter to assist with manual calculation of contributions, though these days most of the calculations are done by computer systems.
Employers are responsible for allocating the correct table letter (sometimes also referred to as an 'NI category') to each employee depending on their particular circumstances। This then defines the rates of employee and employer contribution which apply.
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