Recently new National Insurance Numbers have been issued with the prefix of KC by Jobcentre Plus (on behalf of the Department for Work and Pensions). These National Insurance numbers are valid. Unfortunately there have been issues with these NINOs with the KC prefix as HMRC has not included the KC prefix as a valid prefix on their list of valid prefixes to software developers. So currently HMRC's systems do not recognise the prefix KC and most payroll softwares will not recognise it either. You may not be able to enter the National Insurance number into your payroll software as it may not be recognised and even if you can your Full Payment Submission may be rejected by HMRC due to the prefix not being recognised by HMRC.
HMRC have issued a message regarding the problem "We are aware that a small number of National Insurance numbers with prefix 'KC' were issued recently and that these are causing some problems for our customers."
If you have an employee with a NINO with a KC prefix you should take the following steps when entering their details in your payroll software for the moment, as your RTI returns will successfully submit to HMRC:
• Do not enter the NINO for the employee - this field should be left empty
• The employee's address has to be entered, the first two lines minimum requirement
• You do not need to request a new NINO as the NINO with the KC prefix is valid.
Per HMRC " We are working hard to resolve this issue quickly and will provide more information shortly"