Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
, see all updates

Class 1A National Insurance contributions: Exemptions from Class 1A NICs: Benefits and payments exempt from Class 1A NICs by regulation: General

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

Benefits or payments exempt from both Class 1 and Class 1A NICsThe scope of the legislation which extended Class 1A NICs liability to all benefits in kind, automatically catches any general earnings, or something treated as general earnings, which is chargeable to income tax under ITEPA 2003, if there is no existing Class 1 or Class 1B liability, see

NIM13090.

This means that

  • items that do not attract a Class 1 NICs liability because they have been specifically excluded from Class 1 NICs; and
  • which are, or are treated as, general earnings chargeable to income tax under ITEPA 2003(before 6 April 2003 – emoluments chargeable to income tax under Schedule E)have the potential to attract a Class 1A NICs liability by default.

Benefits exempt from Class 1A NICs An earner may have been provided with a benefit that

  • does not attract a Class 1 NICs liability because it is disregarded from earnings under paragraph 1 Part 2 of Schedule 3 to the SS(C)R 2001 (the payment in kind disregard), and
  • is chargeable to income tax under ITEPA 2003 on an amount of general earnings (before 6 April 2003 – emoluments chargeable to income tax under Schedule E).

Some of these benefits are specifically exempted from Class 1A NICs liability.

Regulation 40 SS(C)R 2001

Any benefit or payment exempt from Class 1A NICs liability, which is not already exempt from income tax by a statutory tax exemption, is listed in regulation 40 SS(C)R 2001.

A list of those benefits and payments excluded from Class 1A NICs liability, is provided at NIM14510.