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HMRC internal manual

National Insurance Manual

HM Revenue & Customs
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Class 1 NICs: Employment Related Securities (ERS): Internationally Mobile Employees (IMEs): introduction

Section 4(4)(a) of the Social Security Contributions and Benefits Act 1992 and Regulation 22(7) of the Social Security (Contributions) Regulations (SSCR) 2001 provide that income received from employment-related securities (ERS) constitutes earnings from an employed earners employment and, as such, is liable for earnings-related National Insurance contributions (NICs).

Schedule 3 SSCR 2001 provides for certain payments to be disregarded in the calculation of earnings for the purposes of establishing liability for earnings-related contributions.

The Social Security (Miscellaneous Amendments No. 2) Regulations 2015, Part 1, Regulation 21 2015 / Statutory Instruments 2015 No. 478 introduced from 6 April 2015, amends Schedule 3 (payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions) in Part 9 (incentives by way of securities) SSCR 2001 and makes provision for payments made to IMEs.

NIM06875 to NIM06915 sets out the rules that are used for calculating how much of the income from ERS constitutes earnings liable for Class 1 NICs and disregards certain amounts, mainly to avoid double charging and to fit in with the wider International NICs rules.