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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
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Class 1A National Insurance contributions: Liability for Class 1A NICs: Conditions to be satisfied for liability to arise: General

Sections 1(6), 10(1) and 10(6) SSCBA 1992 and regulations 145 and 146 SS(C)R 2001 Before liability for Class 1A NICs can arise certain conditions must be satisfied. These are

  • residence and presence conditions in Great Britain, see NIM13040
  • the employment, by reason of which the benefit is provided, must be employed earner’s employment, see NIM13050
  • the benefit must be provided to an employed earner from, or by reason of, his employment, see NIM13060
  • the earner must be chargeable to income tax under ITEPA 2003 on an amount of general earnings (before 6 April 2003 – the earner must be chargeable to income tax under Schedule E on an amount which is or is treated as an emolument), see NIM13070
  • the benefit must be provided to a director, or to an employee within the benefits code (before 6 April 2003 – director or an employee earning at a rate of £8,500 or more per year), see NIM13080
  • the benefit must not attract either a Class 1 or Class 1B NICs liability, see NIM13090.Only where all of these conditions are satisfied can a liability for Class 1A NICs arise.