NIM13080 - Class 1A National Insurance contributions: Liability for Class 1A NICs: Conditions to be satisfied for Class 1A NICs liability to arise: Employment within the benefits code

Section 10(1)(b) of Social Security Contributions and Benefits Act 1992 (SSCBA 1992)

For a Class 1A NICs liability to arise the benefit must be provided to a director or an employee who is in an employment within the meaning of the benefits code (other than an excluded employment, see EIM20007 and below).

Employers are normally required to return benefits provided to such earners on form P11Ds or substitutes.

Earners in excluded employment, that is, not within the benefits code for tax years up to 2015 to 2016

Class 1A NICs were not due in respect of benefits provided to employees and certain directors in excluded employment up to 2015 to 2016 tax year, that is, earning at a rate of less than £8,500 per year. However, employers were required to return certain benefits provided to earners in an excluded employment on forms P9D.

See EIM20007 for more information about the meaning of excluded employment.

There is an exception to this rule where a third party provides non-cash vouchers to earners in an excluded employment. See NIM16356