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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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NIM12022 - Class 1: Calculating Class 1 NICs for Directors: Annual earnings periods: Appointed or ceasing during a tax year

Regulation 8(2) and Regulation 8(3) SSCR 2001

Directors appointed during the tax year have a pro-rata earnings period. The pro-rataearnings period is the number of weeks left in the tax year from and including the week ofappointment (Regulation 8(2) SSCR 2001).

A person who is a director at the start of a tax year or ceases to be a director duringthe tax year has an annual earnings period for that tax year (Regulation 8(3) SSCR 2001).The annual earnings period also remains if the company goes into liquidation. A tax yearstarts on 6 April and ends on the subsequent 5 April.

All pro-rata calculations for directors are based on 52 weeks even if there are 53 weeksin the year. However, if a director is appointed in tax week 53, the pro-rata earningsperiod is 1 week.