NIM14320 - 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) of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)

Position before 6 April 2003

NIM14300 explains that where the conditions of granting an Extra Statutory Concession (ESC) were satisfied for tax purposes, we accepted that no Class 1A NICs were payable. Regulation 40(7)(b) of the Social Security Contributions Regulations 2001 (SSCR 2001), which referred to ESC A6, did not apply to Northern Ireland. So where miners received free coal from their employers in Northern Ireland, that benefit was an emolument chargeable to income tax under Schedule E, even though no tax was payable. As the emolument was chargeable to income tax, Class 1A NICs may have been payable. See NIM13021 for all the Class 1A conditions.

Position from 6 April 2003

Many of the ESCs became obsolete when they were incorporated into the Income tax (Earnings and Pensions) Act (ITEPA) 2003 with effect from 6 April 2003. ESC A6 was incorporated into section 306 of ITEPA 2003. The effect of this is that where miners receive free coal from their employers in the United Kingdom (UK) 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 where in the UK the benefit is provided.