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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1: vouchers - non-cash vouchers - exemptions - provided by third party other than employer

Section 10ZB Social Security Contributions & Benefits Act 1992

Regulation 25 and paragraph 8 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 2000, where from that date:

  • a third party provides an employee, irrespective of the level of their earnings, with a non-cash voucher, and
  • that provision has not been arranged or facilitated by the employer,


  • the non-cash voucher is disregarded for Class 1 NICs purposes; but
  • a Class 1A NICs liability will arise on the cost of the provision of the non-cash voucher. See NIM16357 for guidance on the Class 1A NICs position.

The following table summarises the position of third-party provision from April 1999.

Tax year Class 1 liability? Class 1A liability? Liable party? Further information
1999/00 Yes No Employer NIM02412
2000/01 No Yes Employer, but the third party may choose to pay if it wishes NIM16350 - NIM16366
2001/02 onwards No Yes Third party NIM16350 - NIM16366