NIM02396 - Class 1 NICs: Earnings of employees and office holders: Training and similar costs: Retraining courses for claimants for jobseeker's allowance (Employment Zones)

Regulation 25 and paragraph 5 of Part VII of Schedule 3 to the Social Security(Contributions) Regulations 2001

The Department for Education and Skills initiated the Employment Zones programme in April 2000 to help the long-term unemployed in specified areas to get back into and keep work. The programme ran until the end of March 2002. The programme operated in 15 selected areas in England, Wales and Scotland – it did not operate in Northern Ireland.

To be a participant in a scheme an individual must have been claiming jobseeker’s allowance for a specified period – generally 12 months, but 18 months in some areas.

Because the Employment Zones arrangements were designed to be very flexible there may have been circumstances where payments would have been liable for NICs. Legislation was therefore introduced to ensure that no NICs would be due on any payments under the Employment Zones programme. Legislation which excluded the payments from Class 1 NICs can be found in regulation 25 and paragraph 5 of Part VII of Schedule 3 to the Social Security (Contributions) Regulations 2001 [previously regulation 19(1)(zt) of the Social Security(Contributions) Regulations 1979].

No Class 1A liability arose on any benefits provided under the programme because they were excluded from charge to tax. See NIM13000 for guidance on the general principles concerning liability for Class 1A NICs.