ukpga/1992/4 — Social Security Contributions and Benefits Act 1992

Social Security Contributions and Benefits Act 1992 1992 c. 4 An Act to consolidate certain enactments relating to social security contributions and benefits with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission. [13th February 1992] Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:— Part I Contributions Preliminary Outline of contributory system. 1 1 The funds required— a for paying such benefits under this Act or any other Act as are payable out of the National Insurance Fund and not out of other public money; and b for the making of payments under section 162 of the Administration Act towards the cost of the National Health Service, shall be provided by means of contributions payable to the Inland Revenue by earners, employers and others, together with the additions under subsection (5) below and amounts payable under section 2 of the Social Security Act 1993 . 2 Contributions under this Part of this Act shall be of the following ... classes— a Class 1, earnings-related, payable under section 6 below, being— i primary Class 1 contributions from employed earners; and ii secondary Class 1 contributions from employers and other persons paying earnings; b Class 1A, payable under section 10 below ... by persons liable to pay secondary Class 1 contributions and certain other persons; bb Class 1B, payable under section 10A below by persons who are accountable to the Inland Revenue in respect of income tax on general earnings in accordance with a PAYE settlement agreement; c Class 2, flat-rate, payable ... under section 11 below by self-employed earners; d Class 3, payable under section 13 or 13A below by earners and others voluntarily with a view to providing entitlement to benefit, or making up entitlement; da Class 3A, payable by eligible people voluntarily under section 14A with a view to obtaining units of additional pension; and e Class 4, payable under section 15 below in respect of the profits or gains of a trade, profession or vocation, or under section 18 below in respect of equivalent earnings. 3 The amounts and rates of contributions in this Part of this Act and the other figures in it which affect the liability of contributors shall— a be subject to regulations under sections 19(4) and 116 to 120 below; and b to the extent provided for by Part IX of the Administration Act be subject to alteration by orders made by the Treasury from year to year under that Part, ... 4 Schedule 1 to this Act— a shall have effect with respect to the computation, collection and recovery of contributions of Classes 1, 1A, 1B, , 3 and 3A , and otherwise with respect to contributions of those classes; and b shall also, to the extent provided by regulations made under section 18 below, have effect with respect to the computation, collection and recovery of Class 4 contributions, and otherwise with respect to such contributions, .... 5 For each financial year there shall, by way of addition to contributions, be paid out of money provided by Parliament, in such manner and at such times as the Treasury may determine, amounts the total of which for any such year is equal to the aggregate of all statutory sick pay , statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay and statutory neonatal care pay recovered by employers and others in that year, as estimated by the Government Actuary or the Deputy Government Actuary. 6 No person shall— a be liable to pay Class 1, Class 1A , Class 1B or Class 2 contributions unless he fulfils prescribed conditions as to residence or presence in Great Britain; aa be treated under section 11(5B) as having actually paid Class 2 contributions unless he fulfils such conditions; b be entitled to pay Class 3 contributions unless he fulfils such conditions; or c be entitled to pay Class 1, Class 1A , Class 1B or Class 2 contributions other than those which he is liable to pay, except so far as he is permitted by regulations to pay them. 7 Regulations under subsection (6) above shall be made by the Treasury. Categories of earners. 2 1 In this Part of this Act and Parts II to V below— a “ employed earner ” means a person who is gainfully employed in Great Britain either under a contract of service, or in an office (including elective office) with ... earnings ; and b “ self-employed earner ” means a person who is gainfully employed in Great Britain otherwise than in employed earner’s employment (whether or not he is also employed in such employment). 2 Regulations may provide— a for employment of any prescribed description to be disregarded in relation to liability for contributions otherwise arising from employment of that description; b for a person in employment of any prescribed description to be treated, for the purposes of this Act, as falling within one or other of the categories of earner defined in subsection (1) above, notwithstanding that he would not fall within that category apart from the regulations. 2ZA Regulations under subsection (2)(b) may make provision treating a person (“P”) as falling within one or other of the categories of earner in relation to an employment where arrangements have been entered into the main purpose, or one of the main purposes, of which is to secure— a that P is not treated by other provision in regulations under subsection (2)(b) as falling within that category of earner in relation to the employment, or b that a person is not treated as the secondary contributor in respect of earnings paid to or for the benefit of P in respect of the employment. 2ZB In subsection (2ZA) “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations. 2A Regulations under subsection (2) above shall be made by the Treasury and, in the case of regulations under paragraph (b) of that subsection, with the concurrence of the Secretary of State. 3 Where a person is to be treated by reference to any employment of his as an employed earner, then he is to be so treated for all purposes of this Act; and references throughout this Act to employed earner’s employment shall be construed accordingly. 4 Subsections (1) to (3) above are subject to the provision made by section 95 below as to the employments which are to be treated, for the purposes of industrial injuries benefit, as employed earner’s employments. 5 For the purposes of this Act, a person shall be treated as a self-employed earner as respects any week during any part of which he is such an earner (without prejudice to his being also treated as an employed earner as respects that week by reference to any other employment of his). “Earnings" and “earner". 3 1 In this Part of this Act and Parts II to V below— a “ earnings ” includes any remuneration or profit derived from an employment; and b “ earner ” shall be construed accordingly. 2 For the purposes of this Part of this Act and of Parts II to V below other than those of Schedule 8— a the amount of a person’s earnings for any period; or b the amount of his earnings to be treated as comprised in any payment made to him or for his benefit, shall be calculated or estimated in such manner and on such basis as may be prescribed by regulations made by the Treasury with the concurrence of the Secretary of State . 2A Regulations made for the purposes of subsection (2) above may provide that, where a payment is made or a benefit provided to or for the benefit of two or more earners, a proportion (determined in such manner as may be prescribed) of the amount or value of the payment or benefit shall be attributed to each earner. 3 Regulations made for the purposes of subsection (2) above may prescribe that payments of a particular class or description made or falling to be made to or by a person shall, to such extent as may be prescribed, be disregarded or, as the case may be, be deducted from the amount of that person’s earnings. 4 Subsection (5) below applies to regulations made for the purposes of subsection (2) above which make special provision with respect to the earnings periods of directors and former directors of companies. 5 Regulations to which this subsection applies may make provision— a for enabling companies, and directors and former directors of companies, to pay on account of any earnings-related contributions that may become payable by them such amounts as would be payable by way of such contributions if the special provision had not been made; and b for requiring any payments made in accordance with the regulations to be treated, for prescribed purposes, as if they were the contributions on account of which they were made. Payments treated as remuneration and earnings. 4 1 For the purposes of section 3 above there shall be treated as remuneration derived from employed earner’s employment— a any sum paid to or for the benefit of a person in satisfaction (whether in whole or in part) of any entitlement of that person to— i statutory sick pay; or ii statutory maternity pay; iii ... statutory paternity pay; iv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v statutory adoption pay; ... vi statutory shared parental pay; ... vii statutory parental bereavement pay; or viii statutory neonatal care pay; and b any sickness payment made— i to or for the benefit of the employed earner; and ii in accordance with arrangements under which the person who is the secondary contributor in relation to the employment concerned has made, or remains liable to make, payments towards the provision of that sickness payment. 2 Where the funds for making sickness payments under arrangements of the kind mentioned in paragraph (b) of subsection (1) above are attributable in part to contributions to those funds made by the employed earner, regulations may make provision for disregarding, for the purposes of that subsection, the prescribed part of any sum paid as a result of the arrangements. 3 For the purposes of subsections (1) and (2) above “ sickness payment ” means any payment made in respect of absence from work due to incapacity for work, .... 4 For the purposes of section 3 above there shall be treated as remuneration derived from an employed earner’s employment— a the amount of any gain calculated under section 479 of ITEPA 2003 in respect of which an amount counts as employment income of the earner under section 476 of that Act (charge on acquisition of securities pursuant to option etc ), reduced by any amounts deducted under section 480(1) to (6) of that Act in arriving at the amount counting as such employment income; b any sum paid (or treated as paid) to or for the benefit of the earner which is chargeable to tax by virtue of section 225 or 226 of ITEPA 2003 (taxation of consideration for certain restrictive undertakings). 5 For the purposes of section 3 above regulations may make provision for treating as remuneration derived from an employed earner’s employment any payment made by a body corporate to or for the benefit of any of its directors where that payment would, when made, not be earnings for the purposes of this Act. 6 Regulations may make provision for the purposes of this Part— a for treating any amount on which an employed earner is chargeable to income tax under the employment income Parts of ITEPA 2003 as remuneration derived from the earner’s employment; and b for treating any amount which in accordance with regulations under paragraph (a) above constitutes remuneration as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of his employment. 6A In any case where— a a benefit of a kind mentioned in section 308 or 308A of ITEPA 2003 (contributions to pensions schemes) is provided to or for the benefit of an employed earner pursuant to optional remuneration arrangements, and b the employed earner would be chargeable to income tax in respect of the benefit if section 228A(5) of that Act had effect with the omission of paragraphs (f) and (g) (which refer to sections 308 and 308A), regulations may make provision for the purposes of this Part for treating the amount foregone in relation to the benefit as remuneration derived from the earner’s employment. 6B Regulations made under subsection (6A) must make provision for amounts not exceeding the contributions limit for a tax year not to be so treated. 6C The contributions limit is the amount specified by regulations made under subsection (6A) as the contributions limit for the whole of a tax year; but— a the regulations may make other provision about that limit, including provision prescribing an equivalent of that limit for earners paid weekly or at other intervals; and b if an equivalent is prescribed, the regulations may prescribe an amount which exceeds by not more than £1 the amount which is the arithmetical equivalent of that limit. 6D Regulations made under subsection (6A)— a may make provision for any amount treated as remuneration to be treated as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of the earner’s employment; b may provide, in prescribed cases, for the amount treated as remuneration to be an amount other than the amount foregone in relation to the benefit; and c may provide for that other amount to be calculated in such manner and on such basis as may be prescribed. 6E Expressions which are used in subsection (6A) and the benefits code have the same meaning in that subsection as they have in that code. 7 Regulations under this section shall be made by the Treasury with the concurrence of the Secretary of State. Earnings of workers supplied by service companies etc. 4A 1 Regulations may make provision for securing that where— a an individual (“ the worker ”) personally performs, or is under an obligation personally to perform, services for the purposes of a business carried on by another person (“ the client ”), b the performance of those services by the worker is (within the meaning of the regulations) referable to arrangements involving a third person (and not referable to any contract between the client and the worker), and c the circumstances are such that, were the services to be performed by the worker under a contract between him and the client, he would be regarded for the purposes of the applicable provisions of this Act as employed in employed earner’s employment by the client, relevant payments or benefits are, to the specified extent, to be treated for those purposes as earnings paid to the worker in respect of an employed earner’s employment of his. 2 For the purposes of this section— a “ the intermediary ” means— i where the third person mentioned in subsection (1)(b) above has such a contractual or other relationship with the worker as may be specified, that third person, or ii where that third person does not have such a relationship with the worker, any other person who has both such a relationship with the worker and such a direct or indirect contractual or other relationship with the third person as may be specified; and b a person may be the intermediary despite being— i a person with whom the worker holds any office or employment, or ii a body corporate, unincorporated body or partnership of which the worker is a member; and subsection (1) above applies whether or not the client is a person with whom the worker holds any office or employment. 3 Regulations under this section may, in particular, make provision— a for the worker to be treated for the purposes of the applicable provisions of this Act, in relation to the specified amount of relevant payments or benefits (the worker’s “ attributable earnings ”), as employed in employed earner’s employment by the intermediary; b for the intermediary (whether or not he fulfils the conditions prescribed under section 1(6)(a) above for secondary contributors) to be treated for those purposes as the secondary contributor in respect of the worker’s attributable earnings; c for determining— i any deductions to be made, and ii in other respects the manner and basis in and on which the amount of the worker’s attributable earnings for any specified period is to be calculated or estimated, in connection with relevant payments or benefits; d for aggregating any such amount, for purposes relating to contributions, with other earnings of the worker during any such period; e for determining the date by which contributions payable in respect of the worker’s attributable earnings are to be paid and accounted for; f for apportioning payments or benefits of any specified description, in such manner or on such basis as may be specified, for the purpose of determining the part of any such payment or benefit which is to be treated as a relevant payment or benefit for the purposes of the regulations; g for disregarding for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, an employed earner’s employment in which the worker is employed (whether by the intermediary or otherwise) to perform the services in question; h for otherwise securing that a double liability to pay any amount by way of a contribution of any description does not arise in relation to a particular payment or benefit or (as the case may be) a particular part of a payment or benefit; i for securing that, to the specified extent, two or more persons, whether— i connected persons (within the meaning of section 993 of the Income Tax Act 2007 ), or ii persons of any other specified description, are treated as a single person for any purposes of the regulations; j (without prejudice to paragraph (i) above) for securing that a contract made with a person other than the client is to be treated for any such purposes as made with the client; k for excluding or modifying the application of the regulations in relation to such cases, or payments or benefits of such description, as may be specified. 4 Regulations made in pursuance of subsection (3)(c) above may, in particular, make provision— a for the making of a deduction of a specified amount in respect of general expenses of the intermediary as well as deductions in respect of particular expenses incurred by him; b for securing reductions in the amount of the worker’s attributable earnings on account of— i any secondary Class 1 contributions already paid by the intermediary in respect of actual earnings of the worker, and ii any such contributions that will be payable by him in respect of the worker’s attributable earnings. 5 Regulations under this section may make provision for securing that, in applying any provisions of the regulations, any term of a contract or other arrangement which appears to be of a description specified in the regulations is to be disregarded. 6 In this section— “ the applicable provisions of this Act ” means this Part of this Act and Parts II to V below; “ business ” includes any activity carried on— by a government department or public or local authority (in the United Kingdom or elsewhere), or by a body corporate, unincorporated body or partnership; “ relevant payments or benefits ” means payments or benefits of any specified description made or provided (whether to the intermediary or the worker or otherwise) in connection with the performance by the worker of the services in question; “ specified ” means prescribed by or determined in accordance with regulations under this section. 7 Any reference in this section to the performance by the worker of any services includes a reference to any such obligation of his to perform them as is mentioned in subsection (1)(a) above. 8 Regulations under this section shall be made by the Treasury with the concurrence of the Secretary of State. 9 If, on any modification of the statutory provisions relating to income tax, it appears to the Treasury to be expedient to modify any of the preceding provisions of this section for the purpose of assimilating the law relating to income tax and the law relating to contributions under this Part of this Act, the Treasury may with the concurrence of the Secretary of State by order make such modifications of the preceding provisions of this section as the Treasury think appropriate for that purpose. Limited liability partnerships 4AA 1 The Treasury may, for the purposes of this Act, by regulations— a provide that, in prescribed circumstances— i a person (“E”) is to be treated as employed in employed earner's employment by a limited liability partnership (including where E is a member of the partnership), and ii the limited liability partnership is to be treated as the secondary contributor in relation to any payment of earnings to or for the benefit of E as the employed earner; b prescribe how earnings in respect of E's employed earner employment with the limited liability partnership are to be determined (including what constitutes such earnings); c provide that such earnings are to be treated as being paid to or for the benefit of E at prescribed times. 2 Regulations under subsection (1) may modify the definition of “employee” or “employer” in section 163, 171, 171ZJ , 171ZS , 171ZZ14 or 171ZZ24 below as the Treasury consider appropriate to take account of any provision falling within subsection (1)(a) to (c). 3 If— a a provision of the Income Tax Acts relating to limited liability partnerships or members of limited liability partnerships is passed or made, and b in consequence, the Treasury consider it appropriate for provision to be made for the purpose of assimilating to any extent the law relating to income tax and the law relating to contributions under this Part, the Treasury may by regulations make that provision. 4 The provision that may be made under subsection (3) includes provision modifying any provision made by or under this Act. 5 Regulations under this section are to be made with the concurrence of the Secretary of State. 6 Section 4(4) of the Limited Liability Partnerships Act 2000 does not limit the provision that may be made by regulations under this section. Earnings: power to make retrospective provision in consequence of retrospective tax legislation 4B 1 This section applies where— a a provision of the Income Tax Acts which relates to income tax chargeable under the employment income Parts of ITEPA 2003 is passed or made so as to have retrospective effect (“ the retrospective tax provision ”), and b it appears to the Treasury to be appropriate to make regulations under a relevant power for the purpose of reflecting the whole or part of the provision made by the retrospective tax provision. 2 Those regulations may be made so as to have retrospective effect if it appears to the Treasury to be expedient, in consequence of the retrospective tax provision, for the regulations to have that effect. 3 A “ relevant power ” means a power to make regulations under any of the following provisions— a section 3 (power to prescribe the manner and basis of the calculation or estimation of earnings); b section 4(6) (power to treat amounts chargeable to income tax under the employment income Parts of ITEPA 2003 as earnings); c section 4A (power to treat payments or benefits to workers supplied by service companies etc as earnings). d section 4AA (power to make provision in relation to limited liability partnerships) 4 It does not matter whether the retrospective tax provision in question was passed or made before the day on which the National Insurance Contributions Act 2006 was passed. 5 But nothing in subsection (2) authorises regulations to be made which have effect in relation to any time before 2nd December 2004. 6 Regulations under a relevant power made by virtue of subsection (2) may affect, for the purposes of any contributions legislation for the purposes of which the regulations are made, the earnings in respect of an employment paid to or for the benefit of an earner at a time before the regulations are made. 7 In such a case, subsections (8) and (9) apply and in those subsections and this subsection— “ relevant contributions legislation ” means any contributions legislation for the purposes of which the regulations have the effect mentioned in subsection (6); “ the relevant time ” means the time before the regulations are made mentioned in that subsection; “ the revised earnings ” means the earnings, in respect of the employment, paid to or for the benefit of the earner at the relevant time as determined after applying the regulations. 8 References in any relevant contributions legislation, or any provision made under any such legislation, which relate to— a the earnings, in respect of the employment, paid to or for the benefit of the earner at the relevant time, or b the amount of such earnings so paid at that time, are to be read, in so far as they so relate, as references which relate to the revised earnings or, as the case may be, the amount of those earnings. 9 Any matter which, at the time when the regulations are made, has been determined for the purposes of any relevant contributions legislation, or any provision made under any such legislation, wholly or partly by reference to— a the earnings, in respect of the employment, paid to or for the benefit of the earner at the relevant time, or b the amount of such earnings so paid at that time, is to be redetermined as it would have been determined at the time of the original determination if it had been determined wholly or partly, as the case may be, by reference to the revised earnings or the amount of those earnings. 10 The matters referred to in subsection (9) may include— a whether Class 1 contributions are payable in respect of earnings paid to or for the benefit of the earner in a tax week, and b the amount of any such contribution. 11 Subsections (7) to (10) are subject to any express provision to the contrary (including any such provision made by regulations under section 4C(1)). 12 The power conferred by subsection (2) is without prejudice to any powers conferred by or by virtue of any other provision of this Act or of any other enactment (including any instrument made under an Act). 13 For the purposes of this section “ contributions legislation ” means any Part of this Act or provision of such a Part. Power to make provision in consequence of provision made by or by virtue of section 4B(2) etc 4C 1 The Treasury may by regulations made with the concurrence of the Secretary of State make such provision as appears to the Treasury to be expedient for any of the purposes mentioned in subsection (2) in consequence of any provision made by or by virtue of section 4B(2). 2 Those purposes are— a any purpose relating to any contributions; b any purpose relating to any contributory benefit or contribution-based jobseeker's allowance; c any purpose relating to any statutory payment; d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e any purpose of Chapter 2 of Part 3 of that Act (reduction in state scheme contributions and benefits for members of certified schemes); f such other purposes as may be prescribed by regulations made by the Treasury with the concurrence of the Secretary of State. 3 Regulations under subsection (1) may, in particular, make provision— a modifying any provision of any enactment (including this Act and any enactment passed or made on or after the commencement day); b for any provision of any such enactment to apply in such cases, and with such modifications (if any), as the regulations may prescribe. 4 Regulations under subsection (1) may be made so as to have retrospective effect but must not have effect in relation to any time before 2nd December 2004. 5 In particular, regulations under subsection (1) made by virtue of subsection (4) may affect any of the following matters— a liability to pay contributions ...; b the amount of any contribution ...; c entitlement to a contributory benefit or contribution-based jobseeker's allowance; d the amount of any such benefit or allowance; e entitlement to a statutory payment; f the amount of any such payment; g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i liability to make payments under section 42A(3) of the Pensions Act or to pay minimum contributions under section 43 of that Act; j the amount of any such payment or contribution. 6 In such a case, where the matter has been determined before the time when the regulations are made, the regulations may provide for the matter to be redetermined accordingly. 7 If (ignoring this subsection) the operative provisions would directly or indirectly have effect in any case so as— a to remove a person's entitlement to a contributory benefit, contribution-based jobseeker's allowance or statutory payment, or b to reduce the amount of any such benefit, allowance or payment to which a person has an entitlement, those provisions are to be read with such modifications as are necessary to ensure that they do not have that effect. 8 For the purposes of subsection (7)— a “ the operative provisions ” are section 4B(7) to (10) and any provision made by virtue of section 4B(2) or under subsection (1) of this section; b a person's “ entitlement ” includes any future entitlement which the person may have. 9 The powers conferred by this section are without prejudice to any powers conferred by or by virtue of any other provision of this Act or any other enactment. 10 In particular, any modification of any provision of an instrument by regulations made under subsection (1) is without prejudice to any other power to amend or revoke the provisions of the instrument (including the modified provision). 11 For the purposes of this section— “ the commencement day ” means the day on which the National Insurance Contributions Act 2006 was passed; “ enactment ” includes an instrument made under an Act; “ statutory payment ” means— statutory sick pay, statutory maternity pay, statutory paternity pay, statutory adoption pay , statutory shared parental pay , statutory parental bereavement pay or statutory neonatal care pay ; or any other payment prescribed by regulations made by the Treasury with the concurrence of the Secretary of State. Class 1 contributions Earnings limits and thresholds for Class 1 contributions. 5 1 For the purposes of this Act there shall for every tax year be— a the following for primary Class 1 contributions— i a lower earnings limit, ii a primary threshold, and iii an upper earnings limit; and b a secondary threshold for secondary Class 1 contributions. Those limits and thresholds shall be the amounts specified for that year by regulations ... 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Regulations may, in the case of each of the limits or thresholds mentioned in subsection (1) above, prescribe an equivalent of that limit or threshold in relation to earners paid otherwise than weekly (and references in this or any other Act to “the prescribed equivalent”, in the context of any of those limits or thresholds, are accordingly references to the equivalent prescribed under this subsection in relation to such earners). 5 The power conferred by subsection (4) above to prescribe an equivalent of any of those limits or thresholds includes power to prescribe an amount which exceeds, by not more than £1.00, the amount which is the arithmetical equivalent of that limit or threshold. 6 Regulations under this section shall be made by the Treasury. Liability for Class 1 contributions. 6 1 Where in any tax week earnings are paid to or for the benefit of an earner over the age of 16 in respect of any one employment of his which is employed earner’s employment— a a primary Class 1 contribution shall be payable in accordance with this section and section 8 below if the amount paid exceeds the current primary threshold (or the prescribed equivalent); and b a secondary Class 1 contribution shall be payable in accordance with this section and section 9 below if the amount paid exceeds the current secondary threshold (or the prescribed equivalent). 2 No primary or secondary Class 1 contribution shall be payable in respect of earnings if a Class 1B contribution is payable in respect of them. 3 Except as may be prescribed, no primary Class 1 contribution shall be payable in respect of earnings paid to or for the benefit of an employed earner after he attains pensionable age, but without prejudice to any liability to pay secondary Class 1 contributions in respect of any such earnings. 4 The primary and secondary Class 1 contributions referred to in subsection (1) above are payable as follows— a the primary contribution shall be the liability of the earner; and b the secondary contribution shall be the liability of the secondary contributor; but nothing in this subsection shall prejudice the provisions of paragraphs 3 to 3B of Schedule 1 to this Act. 5 Except as provided by this Act, the primary and secondary Class 1 contributions in respect of earnings paid to or for the benefit of an earner in respect of any one employment of his shall be payable without regard to any other such payment of earnings in respect of any other employment of his. 6 Regulations may provide for reducing primary or secondary Class 1 contributions which are payable in respect of persons to whom Part XI of the Employment Rights Act 1996 (redundancy payments) does not apply by virtue of section 199(2) or 209 of that Act. 7 Regulations under this section shall be made by the Treasury. Notional payment of primary Class 1 contribution where earnings not less than lower earnings limit. 6A 1 This section applies where in any tax week earnings are paid to or for the benefit of an earner over the age of 16 in respect of any one employment of his which is employed earner’s employment and the amount paid— a is not less than the current lower earnings limit (or the prescribed equivalent), but b does not exceed the current primary threshold (or the prescribed equivalent). 2 Subject to any prescribed exceptions or modifications— a the earner shall be treated as having actually paid a primary Class 1 contribution in respect of that week, and b those earnings shall be treated as earnings upon which such a contribution has been paid, for any of the purposes mentioned in subsection (3) below. 3 The purposes are— a the purposes of section 14(1)(a) below; b the purposes of the provisions mentioned in section 21(5A)(a) to (c) below; c any other purposes relating to contributory benefits; ... d any purposes relating to jobseeker’s allowance ; and e any purposes relating to employment and support allowance. 4 Regulations may provide for any provision of this Act which, in whatever terms, refers— a to primary Class 1 contributions being payable by a person, or b otherwise to a person’s liability to pay such contributions, to have effect for the purposes of this section with any prescribed modifications. 5 Except as may be prescribed, nothing in this section applies in relation to earnings paid to or for the benefit of an employed earner after he attains pensionable age. 6 Except as provided by this Act, this section applies in relation to earnings paid to or for the benefit of an earner in respect of any one employment of his irrespective of any other such payment of earnings in respect of any other employment of his. 7 Regulations under this section shall be made by the Treasury. “Secondary contributor". 7 1 For the purposes of this Act, the “ secondary contributor ” in relation to any payment of earnings to or for the benefit of an employed earner, is— a in the case of an earner employed under a contract of service, his employer; b in the case of an earner employed in an office with ... earnings , either— i such person as may be prescribed in relation to that office; or ii if no person is prescribed, the government department, public authority or body of persons responsible for paying the ... earnings of the office; but this subsection is subject to subsection (2) below. 2 In relation to employed earners who— a are paid earnings in a tax week by more than one person in respect of different employments; or b work under the general control or management of a person other than their immediate employer, and in relation to any other case for which it appears to the Treasury that such provision is needed, regulations may provide that the prescribed person is to be treated as the secondary contributor in respect of earnings paid to or for the benefit of an earner. 2A Regulations under subsection (2) may make provision treating a person as the secondary contributor in respect of earnings paid to or for the benefit of an earner if arrangements have been entered into the main purpose, or one of the main purposes, of which is to secure that the person is not so treated by other provision in regulations under subsection (2). 2B In subsection (2A) “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations. 3 Regulations under any provision of this section shall be made by the Treasury. Calculation of primary Class 1 contributions. 8 1 Where a primary Class 1 contribution is payable as mentioned in section 6(1)(a) above, the amount of that contribution is the aggregate of— a the main primary percentage of so much of the earner’s earnings paid in the tax week, in respect of the employment in question, as— i exceeds the current primary threshold (or the prescribed equivalent); but ii does not exceed the current upper earnings limit (or the prescribed equivalent); and b the additional primary percentage of so much of those earnings as exceeds the current upper earnings limit (or the prescribed equivalent). 2 For the purposes of this Act— a the main primary percentage is 8%; and b the additional primary percentage is 2 per cent; but the main primary percentage is subject to alteration under sections 143 and 145 of the Administration Act. 3 Subsection (1) above is subject to— a regulations under section 6(6) above; b regulations under sections 116 to 120 below; ... c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calculation of secondary Class 1 contributions. 9 1 Where a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, the amount of that contribution shall be the relevant percentage of so much of the earnings paid in the tax week, in respect of the employment in question, as exceeds the current secondary threshold (or the prescribed equivalent). 1A For the purposes of subsection (1) “the relevant percentage” is— a if section 9A below applies to the earnings, the age-related secondary percentage; aa if section 9B below (zero-rate secondary Class 1 contributions for certain apprentices) applies to the earnings, 0%; b otherwise, the secondary percentage. 2 For the purposes of this Act the secondary percentage is 15% ; but that percentage is subject to alteration under sections 143 and 145 of the Administration Act. 3 Subsection (1) above is subject to— a regulations under section 6(6) above; b regulations under sections 116 to 120 below; ... c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The age-related secondary percentage 9A 1 Where a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, this section applies to the earnings paid in the tax week, in respect of the employment in question, if the earner falls within an age group specified in column 1 of the table in subsection (3). 1A But this section does not apply to those earnings so far as section 9B below (zero-rate secondary Class 1 contributions for certain apprentices) applies to them. 2 For the purposes of section 9(1A)(a) above, the age-related secondary percentage is the percentage for the earner's age group specified in column 2 of the table. 3 Here is the table— Age group Age-related secondary percentage Under 21 0% 4 The Treasury may by regulations amend the table— a so as to add an age group in column 1 and to specify the percentage in column 2 for that age group; b so as to reduce (or further reduce) the percentage specified in column 2 for an age group already specified in column 1 (whether for the whole of the age group or only part of it). 5 A percentage specified under subsection (4)(a) must be lower than the secondary percentage. 6 For the purposes of this Act a person is still to be regarded as being liable to pay a secondary Class 1 contribution even though the amount of the contribution is £0 because the age-related secondary percentage is 0%. 7 The Treasury may by regulations provide that, in relation to an age group specified in the table, there is to be for every tax year an upper secondary threshold for secondary Class 1 contributions. That threshold is to be the amount specified for that year by regulations made by the Treasury. 8 Subsections (4) and (5) of section 5 above (which confer power to prescribe an equivalent of a secondary threshold in relation to earners paid otherwise than weekly), and subsection (6) of that section as it applies for the purposes of those subsections, apply for the purposes of an upper secondary threshold in relation to an age group as they apply for the purposes of a secondary threshold. 9 Where— a a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, b the earner falls within an age group in relation to which provision has been made under subsection (7), and c the earnings paid in the tax week, in respect of the employment in question, exceed the current upper secondary threshold (or the prescribed equivalent) in relation to the age group, this section is not to apply to the earnings so far as they exceed that threshold (or the prescribed equivalent); and for the purposes of section 9(1) above the relevant percentage in respect of the earnings so far as they exceed that threshold (or the prescribed equivalent) is, accordingly, to be the secondary percentage. 10 In subsections (7) to (9) references to an age group include a part of an age group. Zero-rate secondary Class 1 contributions for certain apprentices 9B 1 Where a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, this section applies to the earnings paid in the tax week, in respect of the employment in question, if the earner is a relevant apprentice in relation to that employment. 2 An earner is a “ relevant apprentice ”, in relation to an employment, if the earner— a is aged under 25, and b is employed, in the employment, as an apprentice. 3 For the purposes of this Act a person is still to be regarded as being liable to pay a secondary Class 1 contribution even if the amount of the contribution is £0 because this section applies to the earnings in question. 4 The Treasury may by regulations provide that, in relation to relevant apprentices, there is to be for every tax year an upper secondary threshold for secondary Class 1 contributions. That threshold is to be the amount specified for that year by regulations made by the Treasury. 5 Subsections (4) and (5) of section 5 above (which confer power to prescribe an equivalent of a secondary threshold in relation to earners paid otherwise than weekly), and subsection (6) of that section as it applies for the purposes of those subsections, apply for the purposes of an upper secondary threshold in relation to relevant apprentices as they apply for the purposes of a secondary threshold. 6 Subsection (7) applies if— a a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, b the earnings paid in the tax week, in respect of the employment in question, exceed the current upper secondary threshold (or the prescribed equivalent) in relation to relevant apprentices, and c the earner is a relevant apprentice in relation to the employment. 7 This section does not apply to those earnings so far as they exceed that threshold (or the prescribed equivalent) (“the excess earnings”) and, accordingly, for the purposes of section 9(1) above the relevant percentage in respect of the excess earnings is the secondary percentage. 8 But the Treasury may by regulations modify the effect of subsection (7) in a case in which the earner falls within an age group specified in column 1 of the table in section 9A(3) above. 9 In subsection (2)(b) “apprentice” has such meaning as the Treasury may prescribe. 10 The Treasury may by regulations amend subsection (2)(a) so as to alter the age that an earner must be in order to be a relevant apprentice (and regulations under this subsection may have the effect of allowing anyone who is of an age at which secondary Class 1 contributions are payable to be a relevant apprentice). Class 1A contributions Class 1A contributions ... 10 1 Where— a for any tax year an earner is chargeable to income tax under ITEPA 2003 on an amount of general earnings received by him from any employment (“ the relevant employment ”), b the relevant employment is both— i employed earner’s employment, and ii an employment, other than lower-paid employment as a minister of religion , within the meaning of the benefits code (see Chapter 2 of Part 3 of ITEPA 2003), and c the whole or a part of the general earnings falls, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner, a Class 1A contribution shall be payable for that tax year, in accordance with this section, in respect of that earner and so much of the general earnings as falls to be so left out of account. 1A A Class 1A contribution is payable for a tax year, in accordance with this section, in respect of an earner and the amount of a termination award if and so far as— a that amount counts as employment income of the earner under section 403 of ITEPA 2003 (charge on termination payments or benefits), and b the earner is chargeable to income tax on that amount for the tax year by virtue of that section. 1B No Class 1A contribution is payable under subsection (1A) in respect of an amount so far as it is an amount of earnings in respect of which Class 1 contributions are payable. 1C No Class 1A contribution is payable under subsection (1A) unless the employment which is terminated is employed earner's employment. 2 Subject to sections 10ZA and 10ZBA , a Class 1A contribution payable under subsection (1) for any tax year shall be payable by— a the person who is liable to pay the secondary Class 1 contribution relating to the last (or only) relevant payment of earnings in that tax year in relation to which there is a liability to pay such a Class 1 contribution; or b if paragraph (a) above does not apply, the person who, if the general earnings in respect of which the Class 1A contribution is payable were earnings in respect of which Class 1 contributions would be payable, would be liable to pay the secondary Class 1 contribution. 3 In subsection (2) above “ relevant payment of earnings ” means a payment which for the purposes of Class 1 contributions is a payment of earnings made to or for the benefit of the earner in respect of the relevant employment. 3A A Class 1A contribution payable under subsection (1A) is payable by the person who, if the amount in respect of which the Class 1A contribution is payable were earnings in respect of which Class 1 contributions would be payable, would be liable to pay the secondary Class 1 contribution. 4 The amount of the Class 1A contribution payable under subsection (1) in respect of any general earnings shall be the Class 1A percentage of so much of them as falls to be left out of account as mentioned in subsection (1)(c) above. 4A The amount of the Class 1A contribution payable under subsection (1A) in respect of an amount is the Class 1A percentage of that amount. 5 In subsections (4) and (4A) above “ the Class 1A percentage ” means a percentage rate equal to the secondary percentage for the tax year in question. 6 No Class 1A contribution shall be payable for any tax year in respect of so much of any general earnings as are taken for the purposes of the making of Class 1B contributions for that year to be included in a PAYE settlement agreement. 7 In calculating for the purposes of this section the amount of general earnings received by an earner from an employment, a deduction under any of the excluded provisions is to be disregarded. This subsection does not apply in relation to a deduction if subsection (7A) applies in relation to it. 7A Where— a a deduction in respect of a matter is allowed under an excluded provision, and b the amount deductible is at least equal to the whole of any corresponding amount which would (but for this section) fall by reference to that matter to be included in the general earnings mentioned in subsection (7), the whole of the corresponding amount shall be treated as not included. 7B For the purposes of subsections (7) and (7A) “ excluded provision ” means— a any provision of Chapter 2 of Part 5 of ITEPA 2003 (deductions for employee’s expenses), other than section 352 (limited deduction for agency fees paid by entertainers), ... aa any of sections 363 to 365 of ITEPA 2003 (certain deductions from benefits code earnings), or b any provision of Chapter 5 of Part 5 of ITEPA 2003 (deductions for earnings representing benefits or reimbursed expenses). 8 The Treasury may by regulations— a modify the effect of subsections (7) and (7A) above by amending subsection (7B) so as to include any enactment contained in the Income Tax Acts within the meaning of “excluded provision”; or b make such amendments of subsections (7) to (7B) above as appear to them to be necessary or expedient in consequence of any alteration of the provisions of the Income Tax Acts relating to the charge to tax on employment income . 9 The Treasury may by regulations provide— a for Class 1A contributions not to be payable, in prescribed circumstances, by prescribed persons or in respect of prescribed persons , general earnings or termination awards ; b for reducing Class 1A contributions in prescribed circumstances. 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 The Treasury may by regulations modify the law relating to Class 1A contributions in the case of an employed earner's employment which is treated as existing by virtue of regulations under section 4AA. 12 In this section “ termination award ” means a payment or benefit received by an earner (or an earner's spouse, civil partner, blood relative or dependant) in connection with the termination of the earner's employment. Liability of third party provider of benefits in kind. 10ZA 1 This section applies, where— a a Class 1A contribution is payable for any tax year in respect of the whole or any part of general earnings received by an earner; b the general earnings, in so far as they are ones in respect of which such a contribution is payable, consist in a benefit provided for the earner or a member of his family or household; c the person providing the benefit is a person other than the person (“ the relevant employer ”) by whom, but for this section, the Class 1A contribution would be payable in accordance with section 10(2) above; and d the provision of the benefit by that other person has not been arranged or facilitated by the relevant employer. 1A This section does not apply if the benefit is a sporting testimonial payment (see section 10ZBA). 2 For the purposes of this Act if— a the person providing the benefit pays an amount for the purpose of discharging any liability of the earner to income tax for any tax year, and b the income tax in question is tax chargeable in respect of the provision of the benefit or of the making of the payment itself, the amount of the payment shall be treated as if it were general earnings consisting in the provision of a benefit to the earner in that tax year and falling, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner. 3 Subject to subsection (4) below, the liability to pay any Class 1A contribution in respect of— a the benefit provided to the earner, and b any further benefit treated as so provided in accordance with subsection (2) above, shall fall on the person providing the benefit, instead of on the relevant employer. 4 Subsection (3) above applies in the case of a Class 1A contribution for the tax year beginning with 6th April 2000 only if the person providing the benefit in question gives notice in writing to the Inland Revenue on or before 6th July 2001 that he is a person who provides benefits in respect of which a liability to Class 1A contributions is capable of falling by virtue of this section on a person other than the relevant employer. 5 The Treasury may by regulations make provision specifying the circumstances in which a person is or is not to be treated for the purposes of this Act as having arranged or facilitated the provision of any benefit. 6 In this section references to a member of a person’s family or household shall be construed in accordance with section 721(5) of ITEPA 2003 . Non-cash vouchers provided by third parties. 10ZB 1 In section 10ZA above references to the provision of a benefit include references to the provision of a non-cash voucher. 2 Where— a a non-cash voucher is received by any person from employment which is lower-paid employment as a minister of religion , and b the case would be one in which the conditions in section 10ZA(1)(a) to (d) above would be satisfied in relation to the provision of that voucher if that employment were not lower-paid employment as a minister of religion , sections 10 and 10ZA above shall have effect in relation to the provision of that voucher, and to any such payment in respect of the provision of that voucher as is mentioned in section 10ZA(2) above, as if that employment were not lower-paid employment as a minister of religion . 3 In this section “ non-cash voucher ” has the same meaning as in section 84 of ITEPA 2003 . Liability of third party controller of sporting testimonial 10ZBA 1 This section applies where— a a Class 1A contribution is payable for any tax year in respect of the whole or any part of general earnings received by an earner; b the general earnings, in so far as they are ones in respect of which such a contribution is payable, consist in a sporting testimonial payment; and c the controller of the sporting testimonial is not the person (“the relevant employer”) by whom, but for this section, the Class 1A contribution would be payable in accordance with section 10(2). 2 The controller of the sporting testimonial, instead of the relevant employer, is liable to pay any Class 1A contribution in respect of the sporting testimonial payment. 3 Subsection (4) applies if— a the controller of the sporting testimonial pays an amount (“the amount to cover tax”) for the purpose of discharging any liability of the earner to income tax for any tax year (“ the relevant year ”), and b the income tax in question is tax chargeable in respect of the sporting testimonial payment or of the amount to cover tax. 4 For the purposes of this Act the amount to cover tax is to be treated as if it were general earnings consisting in the making of a sporting testimonial payment to the earner in the relevant year and falling, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner. 5 The controller of the sporting testimonial, instead of the relevant employer, is liable to pay any Class 1A contribution in respect of any further sporting testimonial payment treated as made to the earner in accordance with subsection (4). 6 Expressions used in this section and section 226E of ITEPA 2003 (sporting testimonial payments) have the same meaning as in that section. Class 1A contributions: power to make provision in consequence of retrospective tax legislation 10ZC 1 The Treasury may by regulations make such provision as appears to the Treasury to be expedient for any purpose of the law relating to Class 1A contributions in consequence of any relevant retrospective tax provision— a which is passed or made at or before the time when the regulations are made, or b which may be passed or made after that time. 2 “ Relevant retrospective tax provision ” means a provision of the Income Tax Acts which— a has retrospective effect, and b affects the amount of general earnings received by an earner from an employment on which he is chargeable to income tax under the employment income Parts of ITEPA 2003 for a tax year. 3 It does not matter whether the relevant retrospective tax provision was passed or made before the commencement day. 4 Regulations under this section may, in particular, make provision— a modifying any provision of any enactment (including this Act and any enactment passed or made on or after the commencement day); b for any provision of any such enactment to apply in such cases, and with such modifications (if any), as the regulations may prescribe. 5 Regulations under this section may be made so as to have retrospective effect but must not have effect in relation to any time before 2nd December 2004. 6 In particular, regulations under this section made by virtue of subsection (5)— a may affect matters determined before the time when the regulations are made, and b may provide for those matters to be redetermined accordingly. 7 Regulations under this section— a may not impose any liability to pay a Class 1A contribution, and b may not increase the amount of any Class 1A contribution. 8 The powers conferred by this section are without prejudice to— a any liability to pay a Class 1A contribution which arises by virtue of any relevant retrospective tax provision, and b any powers conferred by or by virtue of any other provision of this Act or any other enactment. 9 In particular, any modification of any provision of an instrument by regulations under this section is without prejudice to any other power to amend or revoke the provisions of the instrument (including the modified provision). 10 For the purposes of this section— “ the commencement day ” means the day on which the National Insurance Contributions Act 2006 was passed; “ enactment ” includes an instrument made under an Act. Class 1B contributions Class 1B contributions 10A 1 Where for any tax year a person is accountable to the Inland Revenue in respect of income tax on general earnings of his employees in accordance with a PAYE settlement agreement, a Class 1B contribution shall be payable by him for that tax year in accordance with this section. 2 The Class 1B contribution referred to in subsection (1) above is payable in respect of— a the amount of any of the general earnings included in the PAYE settlement agreement which are chargeable emoluments; and b the total amount of income tax in respect of which t