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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: Removal benefits and expenses: Class 1 and Class 1A NICs on removal benefits and expenses

Class 1A NICs due on removal benefits – Section 10(1) SSCBA 1992Where removal benefits are provided

  • which are not exempt from income tax but are disregarded from earnings under the payment in kind disregard, see NIM02020; or
  • which are within section 272 of ITEPA 2003 (or equivalent in ICTA 1988), but exceed the tax exemption limit (see EIM03138 or SE03138)there will be an amount of general earnings chargeable to income tax (before 6 April 2003 – emoluments chargeable to income tax under ITEPA 2003), so section 10(1)(a) of the SSCBA 1992 is satisfied. The general earnings chargeable to income tax are disregarded from earnings under the payment in kind disregard, so section 10(1)(c) of the SSCBA 1992 is satisfied, see

NIM13090. If the employee is within the benefits code (before 6 April 2003 – Chapter II of Part V of ICTA 1988) all the conditions in section 10(1) of the SSCBA are satisfied so Class 1A NICs will be due. Class 1A NICs are due on the amount of general earnings chargeable to income tax. See NIM16275 for an example.

Class 1 NICs due on removal expensesWhere removal expenses are paid, which

  • are not exempt from income tax, and
  • are not disregarded from earnings under the payment in kind disregard, see NIM02020,Class 1 NICs are due, see

NIM06150.

Class 1A NICs due on removal expenses – Section 10(1) of the SSCBA 1992Where removal expenses are paid, which

  • are within section 272 of ITEPA 2003 (or equivalent in ICTA 1988), and
  • exceed the tax exemption limit (see EIM03138 or SE03138),there will be an amount of general earnings chargeable to income tax (before 6 April 2003 – emoluments chargeable to income tax under ITEPA 2003), so section 10(1)(a) of the SSCBA 1992 is satisfied. The general earnings chargeable to income tax are disregarded from earnings under paragraph 2 of Part 8 of Schedule 3 to the SSCR 2001, so Class 1 NICs are not due. Therefore, section 10(1)(c) of the SSCBA 1992 is satisfied, see

NIM13090. If the employee is within the benefits code (before 6 April 2003 – Chapter II of Part V of ICTA 1988) all the conditions in section 10(1) of the SSCBA are satisfied so Class 1A NICs will be due. See NIM16275 for an example.

Where removal expenses are

  • not within section 272 of ITEPA 2003 (before 6 April 2003 – ICTA 1988 equivalent), and
  • they are disregarded from earnings under paragraph 2 of Part 8 of Schedule 3 of the SSCR 2001 Class 1A NICs will be due if the employee is within the benefits code (before 6 April 2003 - Chapter II of Part V of ICTA 1988). That is because all the conditions in section 10(1) of the SSCBA 1992 are satisfied, see

NIM13021. For an example of when Class 1A NICs liability will arise in these circumstances see NIM16275.