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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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Class 1A National Insurance contributions: Exemptions from Class 1A NICs: Benefits exempt from income tax: Benefits provided for business and private use

Benefits provided for business use, private use not significant

NIM14001 lists the circumstances when there will be no Class 1A NICs liability. No liability to income tax arises in respect of the provision for an employee of accommodation, supplies or services used by the employee in performing duties of the employment, where the private use is not significant, section 316 of ITEPA 2003 (before 6 April 2003 - section 155ZA of ICTA 1988). Further guidance on this exemption is at EIM21610 and EIM21611 (before 6 April 2003 – SE21601 and SE21602). Where a benefit is not chargeable to tax because the private use is not significant, the employer is not liable for Class 1A NICs on that benefit. That is because there is no amount of general earnings chargeable to income tax under ITEPA 2003 (before 6 April 2003 – no emoluments chargeable to income tax under Schedule E). Section 10(1)(a) of the SSCBA 1992 is not satisfied, see NIM13070.

Benefits provided for business use, private use more than not significantSection 316 of ITEPA 2003 (before 6 April 2003 – section 155ZA of ICTA 1988) does not apply to general earnings chargeable to income tax under ITEPA 2003 where an employee may be entitled to a tax deduction, such as that provided by section 336 of ITEPA 2003 (deductions for expenses: the general rule) (see EIM31620). Before 6 April 2003 this was section 198 of ICTA 1988. Guidance on calculating Class 1A NICs where a tax deduction may be available is provided at

NIM15500.