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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: Special Class 1A NICs cases: Incidental overnight expenses provided as a benefit

Regulation 25 and paragraph 1(2)(b) of Part 5 and paragraph 4 of Part 10 of Schedule 3 to the Social Security (Contributions) Regulations 2001The general NICs treatment of incidental overnight expenses (IOE) (previously referred to as Personal Incidental Expenses (PIEs)) is provided at

NIM06015, including the conditions which must be satisfied for IOE to be excluded from either Class 1 or Class 1A NICs liability.

From 6 April 2000, where IOE is provided by means of a benefit and it fails to meet the conditions explained at NIM06015, a Class 1A NICs liability will arise.

Where IOE is provided in more than one form, for example partly in cash and partly by means of a benefit, the various elements making up the IOE must be added together to determine whether the IOE prescribed maximum is exceeded, see NIM06020. Where the IOE prescribed maximum is exceeded, the class of NICs due will depend upon how the IOE is made up.

  • Class 1A NICs will be due on any element consisting of a benefit providing the conditions in section 10(1) of the SSCBA are satisfied, see NIM13021.
  • Class 1NICs will be due on any cash, non-cash voucher or credit card payments.