A National Insurance fiasco could affect millions of state pensions.

Nine million people have not been credited with paying their National Insurance contributions – worth £1.2 billion. The blunder puts them in danger of not receiving a full pension.

HM Revenues & Customes tried to shift the blame, saying that problems arise when ‘employers provide insufficient details about their employees’.

A full state pension is awarded to those who have paid NI contributions for at least 30 years.

But employers were quick to react to the suggesion that HMRC was free from blame.

Phil McCabe, at the Forum of Private Businesses, said: ‘HMRC has got a track record of poor administration, poor levels of service and inefficiency... Our tax system needs to be simplified.’

Meanwhile, Andrew Cave, spokesman for the Federation of Small Businesses, said: ‘We are concerned that HMRC is failing in its duty to keep proper records and is letting down employers by not informing when insufficient information is supplied. It is imperative that HMRC look to rectify this as a matter of urgency.’

A spokesperson from HMRC tried to pour cold water on the escalating row, saying: ‘We are absolutely not pointing the finger at employers. A small proportion of P14s don’t match – the taxpayer could have gone abroad or could be a migrant worker for instance.’

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