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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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Class 1: Vouchers - non-cash vouchers - exemptions - passenger transport undertakings under pre-26th March 1982 arrangements

Regulation 25 and paragraph 2 of Part 5 of Schedule 3 Social Security (Contributions) Regulations 2001

NIM02416 shows the types of non-cash voucher (see NIM02413 ) that are specifically disregarded in calculating an employee’s earnings for Class 1 NICs purposes. Since 6th April 1999, a non-cash voucher to which section 86 ITEPA 2003 (transport undertakings under pre-26th March 1982 arrangements) applies is disregarded so long as:

  • the arrangements are intended to enable the employee or a member of their family to obtain passenger transport services provided by:

    • the employer
    • a 100% subsidiary of the employer
    • a body corporate of which the employer is a 100% subsidiary
    • another passenger transport undertaking; and
  • the employee is in “lower paid employment” as defined in section 217 ITEPA 2003.

For details of:

  • the tax position of such vouchers, see EIM16070;
  • the meaning of “lower paid employment”, see EIM20007.