Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
, see all updates

Class 1 NICs: Securities: Amounts treated as earnings

Regulation 22 of the Social Security (Contributions) Regulations 2001

Part 7 of the Income Tax (Earnings and Pensions) Act 2003 contains the tax charging provisions relating to securities and securities options that are acquired in connection with an employment.

Section 4(4)(a) of the Social Security Contributions and Benefits Act 1992 treats as earnings gains from the exercise, assignment or release of a securities options. Provisions within regulation 22 SSCR 2001 also treats certain payments as earnings and this ensures consistency of treatment for income tax and NICs whenever value from securities passes to an employee.

Top of page

Regulation 22(4) SSCR 2001

An amount which is treated as earnings by virtue of section 222(2) of ITEPA 2003 is treated as earnings liable for Class1 NICs - see NIM06834.

Top of page

Regulation 22(5) SSCR 2001

An amount which counts as employment income by virtue of Chapter 2 of Part 7 of ITEPA 2003, as originally enacted, in respect of conditional shares or an interest in conditional shares acquired before 16 April 2003 is treated as earnings liable for Class 1 NICs.

Top of page

Regulation 22(6) SSCR 2001

An amount which counts as employment income by virtue of Chapter 4 of Part 7 of ITEPA 2003, as originally enacted, in respect of shares, or an interest in shares, acquired before 16 April 2003 is treated as earnings liable for Class 1 NICs.

Top of page

Regulation 22(7) SSCR 2001

An amount which counts as employment income and to which section 698 of ITEPA 2003 applies (PAYE: special charges on employment-related securities) is treated as earnings liable for Class 1 NICs.

Section 698 of ITEPA 2003 applies where income tax is accountable through PAYE by reason of the operation of:

(a) section 426 - restricted securities and restricted interest in securities (seeNIM06827)

(b) section 438 - convertible securities (see NIM06828)

(c/d) section 446B/446L - securities with an artificially depressed/enhanced market value (see NIM06829)

(e) section 446U - securities acquired for less than market value: charge on notional loan (see NIM06830)

(ea) section 446UA - securities acquired for less than market value (charge in avoidance cases)

(f) section 446Y - securities disposed of for more than market value (see NIM06831)

(g) section 447 - chargeable benefits from securities or interests in securities (see NIM06832)

Top of page

Regulation 22(8) SSCR 2001

An amount which counts as employment income by virtue of section 508 of ITEPA 2003 (operation of tax charges in connection with approved Share Incentive Plan) is treated as earnings liable for Class 1 NICs -see NIM06806.