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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 - suggestion schemes

Regulation 25 and paragraph 6(c) of Part 5 of Schedule 3 Social Security (Contributions) Regulations 2001

Section 321 ITEPA 2003

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 2001, a non-cash voucher which is exempt from income tax by virtue of the above tax provision is so disregarded.

Where the amount of the award exceeds the permitted maximum, the excess amount is not disregarded in the calculation of the person’s earnings.

For details of:

  • the tax position of staff suggestion awards, see EIM06600 - EIM06670
  • the permitted maximum for an encouragement award, see EIM06620
  • the permitted maximum for a financial benefit award, see EIM06630.