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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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NIM07042 - Class 1 NICs: Payments made under employment legislation: Unfair dismissal: Pay under an order for the continuation of a contract of employment: NICs treatment

Sections 128-130 Employment Rights Act 1996

Sections 163-164 Trade Union and Labour Relations (Consolidation) Act 1992

Section 112(3)(b) Social Security Contributions and Benefits Act 1992

Regulation 2(b) Social Security (Contributions) (Employment Protection) Regulations1977

Under the above regulation an amount payable by way of pay under an order for thecontinuation of a contract of employment is:

  • treated as earnings payable by the person liable to make such payment to the person entitled to receive it
  • to be so payable for the period specified by the employment tribunal (“ET”).

The gross amount paid under an order for the continuation of a contract of employmentshould be taken into account in assessing the NICs liability.

For details about:

  • what an order for the continuation of a contract of employment is, see NIM07040
  • the assessment by the ET of the amount payable by the employer to the employee, see NIM07041
  • the earnings period to use in calculating the amount of Class 1 NICs, see NIM07060.