What Happens If My Employee Has No National Insurance Number

Introduction

Employers use National Insurance numbers to record tax and NI contributions correctly for each employee. However, some workers, such as foreign nationals or young people starting their first job, may not yet have one when they join your organisation.

You can still employ them legally, but you must follow certain steps to ensure their pay and tax are reported correctly to HMRC while they apply for their NI number.

What is a National Insurance number

A National Insurance number is a unique reference used by HMRC and the Department for Work and Pensions to track an individual’s tax and benefit records. It usually consists of two letters, six numbers, and a final letter (for example, AB123456C).

Every person who works or claims benefits in the UK must have one. It ensures their National Insurance contributions are recorded correctly toward state benefits and pensions.

Can you employ someone without an NI number

Yes. There is no legal barrier preventing you from hiring someone who does not yet have a National Insurance number, as long as they have the right to work in the UK.

However, you must:

Confirm and document their right to work using valid identification such as a passport or visa.

Include their personal details on your payroll and HMRC submissions.

Encourage them to apply for an NI number as soon as possible.

Employers must not delay paying staff or reporting to HMRC while waiting for an NI number.

How to pay an employee with no NI number

If your employee does not yet have an NI number, you can still run payroll using HMRC’s Real Time Information (RTI) system. Instead of entering an NI number, leave the field blank in your payroll software and complete all other details accurately, including:

Full name.

Date of birth.

Gender.

Address.

HMRC will use this information to identify the employee and allocate contributions correctly once their NI number is issued.

When submitting your first Full Payment Submission (FPS), include as much personal information as possible to prevent mismatched records.

Applying for a National Insurance number

Employees who do not have an NI number must apply for one through the Department for Work and Pensions (DWP). The process is straightforward:

Apply online: The employee can complete an application on the GOV.UK website.

Provide documentation: They must upload proof of identity, such as a passport, biometric residence permit, or national ID card.

Attend an interview (if required): Some applicants are asked to attend an in-person interview.

Wait for confirmation: The NI number is usually sent by post within several weeks.

In the meantime, the employee can continue working and paying tax as normal.

Foreign nationals and temporary workers

Overseas workers who have moved to the UK may not have an NI number immediately. They can still start work legally if they have:

The right to work in the UK under immigration laws.

A valid visa or biometric residence permit showing work entitlement.

Encourage them to apply for an NI number as soon as they begin employment. You can assist by providing an employment confirmation letter if requested by the DWP.

National Insurance and tax deductions without an NI number

Even without an NI number, you must still deduct Income Tax and National Insurance contributions through PAYE. Your payroll software will calculate these deductions automatically based on the employee’s earnings and tax code.

HMRC will allocate payments to the correct record once the employee’s NI number is confirmed. To ensure accuracy, use the same personal details for each payroll submission until the NI number becomes available.

When you receive the employee’s NI number, update your payroll records and inform HMRC through your next RTI submission.

Right-to-work checks remain essential

An NI number is not proof of an individual’s right to work in the UK. Employers must still carry out right-to-work checks before employment begins. Acceptable documents include:

A valid passport showing the holder is a British citizen or has permission to work.

A biometric residence permit or immigration status document.

A share code provided by the Home Office for online right-to-work verification.

Failing to complete these checks can lead to fines or penalties, even if the employee later obtains an NI number.

Common issues when employees lack NI numbers

Duplicate records: HMRC may create temporary accounts if multiple submissions use inconsistent details. Always use the same name, address, and date of birth until the NI number is confirmed.

Payroll software errors: Some systems require a temporary placeholder (such as XX123456X) if the NI field cannot be left blank. Check your provider’s guidance.

Delayed applications: Remind employees that applying early avoids confusion later when contributions are reconciled.

Keeping accurate and consistent payroll information prevents most of these issues.

Communicating with employees

Explain to the employee that their pay will still be processed and taxed normally while they apply for an NI number. Reassure them that their contributions will be recorded once the number is allocated.

You can also provide written confirmation of employment if they need it to support their NI number application.

How to update payroll once the NI number arrives

When the employee receives their NI number:

Record it in your payroll system.

Include it in your next RTI submission to HMRC.

Verify that all past payroll data matches correctly.

HMRC will link the NI number to previous contributions, so the employee’s records remain accurate.

Avoiding discrimination

Employers must treat applicants fairly regardless of whether they have an NI number. Refusing to hire someone solely because they do not yet have one could be seen as discriminatory, particularly for overseas workers who have legal permission to work.

You can, however, make employment conditional on providing right-to-work evidence before starting the role.

Common mistakes to avoid

Delaying payroll until an NI number is provided.

Entering incorrect personal details in payroll submissions.

Failing to perform right-to-work checks before employment begins.

Forgetting to update HMRC once the NI number is issued.

Assuming that all foreign workers automatically have NI numbers.

Avoiding these mistakes ensures smooth payroll processing and compliance with employment law.

Conclusion

If an employee does not yet have a National Insurance number, you can still employ and pay them legally. Simply run payroll using their personal details, make the correct tax and NI deductions, and encourage them to apply for an NI number as soon as possible.

By maintaining accurate payroll records, performing right-to-work checks, and updating HMRC once the number is issued, you can keep your business fully compliant while supporting new staff as they settle into their role.