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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Exemptions from Class 1A NICs: Benefits covered by Extra Statutory Concessions: Extra Statutory Concession A6 (miners free coal and allowances in lieu)

Section 10(9) SSCBA 1992 and regulation 40(7)(b) SS(C)R 2001

Position before 6 April 2003

NIM14300 explains that where the conditions of granting an Extra Statutory Concession (ESC) are satisfied for tax purposes, we accept that no Class 1A NICs are payable. Regulation 40(7)(b) of the SS(C)R 2001, which refers to ESC A6, does not apply to Northern Ireland. So where miners received free coal from their employers in Northern Ireland, that benefit is an emolument chargeable to income tax under Schedule E, even though no tax would be payable. As the emolument is chargeable to income tax, Class 1A NICs may be payable. See NIM13021 for all the Class 1A conditions.

Position from 6 April 2003Many of the ESCs that existed before ITEPA 2003 became obsolete when they were incorporated into ITEPA 2003 with effect from 6 April 2003. ESC A6 was incorporated into section 306 of ITEPA. The effect of this is that where miners receive free coal from their employers, in the United Kingdom (Great Britain and Northern Ireland), there will be no Class 1A NICs liability. Section 306 of ITEPA 2003 exempts the benefit from income tax. Therefore, there is no amount of general earnings chargeable to income tax under ITEPA 2003. Section 10(1)(a) of the SSCBA 1992 is not satisfied regardless of whether the benefit is provided in Northern Ireland or Great Britain.