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HMRC internal manual

National Insurance Manual

Tips, gratuities and service charges: class 1A national insurance contributions

Section 10(9)(a) of the SSCBA 1992 and regulation 40(2)(d) of the SS(C)R 2001

Where the conditions in the gratuity disregard are satisfied (see NIM02905) there is no Class 1 NICs liability. Although the payments are general earnings chargeable to income tax under ITEPA 2003, there will be no Class 1A NICs liability. For guidance about Class 1A NICs liability, see

  • NIM13020 explains the conditions that must be satisfied for Class 1A NICs liability to arise.
  • NIM14500 explains that certain payments are excluded from the payment of Class 1A NICs by regulation.