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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Liability for Class 1A NICs: Introduction

Class 1A NICs were introduced as a new class of NICs on 6 April 1991, payable by employers on the provision of cars and car fuel benefits made available for the private use of directors and employees within employment covered by Part V, Chapter II of ICTA 1988 (see SE20005).

From 6 April 2000 liability for Class 1A NICs was extended to cover most taxable benefits in kind.

Guidance on liability for Class 1A NICs

  • before 6 April 2000 is contained at NIM17500 onwards
  • from 6 April 2000 is contained at NIM13020 onwards.Although the principal conditions establishing liability for Class 1A NICs from 6 April 2000, were retained after the extension of Class 1A NICs to most benefits in kind, some changes were made. These included the introduction

  • of a new method of calculating the total amount of Class 1A NICs due in any one tax year;
  • and, for the first time, the possibility that someone other than a person’s employer could be liable to pay Class 1A NICs.