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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Calculating Class 1A NICs: Reducing the amount of Class 1A NICs due

When calculating the amount of general earnings (before 6 April 2003 – emoluments) on which Class 1A NICs are due, to complete form P11D(b), the employer adds together totals shown on forms P11D. In certain circumstances the amounts recorded as the cash equivalent of the benefits on form P11D, can be reduced for the purposes of calculating Class 1A NICs. So, for example, where a benefit is provided for business use only and a fully matching tax deduction is available to the employee, see NIM15500.

Where the employer is entitled to reduce the amount of Class 1A NICs due because a fully matching deduction is available, he will need to adjust his Class 1A calculation by using the P11D(b) adjustment facility, see NIM15300.