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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
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Class 1A National Insurance contributions: Special Class 1A NICs cases: Removal benefits and expenses: Relocation moves before 6 April 1998

Special NIC rules for relocation expenses and benefits Special NIC rules apply to relocation expenses and benefits paid on or after 6 April 2000 (the date when Class 1A NICs was extended to most benefits) in respect of moves which took place before 6 April 1998. These are explained at

NIM06115 onwards.

Circumstances when Class 1A NICs liability arises Where, unusually, a removal benefit is provided or an expense paid after 6 April 2000 which relates to a move which took place before 6 April 1998, the following are liable for Class 1A NICs

  • relocation benefits not within Schedule 11A ICTA 1988, for example compensation payments for loss on sale, see SE03126
  • relocation benefits within Schedule 11A ICTA 1988 but which are non- qualifying benefits because they fail to meet the conditions set out at SE03104
  • relocation expenses which are within Schedule 11A but which are non-qualifying expenses because they were not paid within the time limit, see SE03104
  • relocation expenses and benefits which exceed the qualifying limit of £8,000, see SE03103.

Regulation 40(4) of the SSCR 2001No Class 1A NICs liability arises on removal expenses which relate to a move which took place before 6 April 1998, if

  • excluded from the calculation of a person’s earnings by virtue of paragraph 2(2)(b) of Part 8 of Schedule 3 to the SSCR 2001 (see NIM06125); and
  • paid in respect of removal expenses which are not within the meaning of Schedule 11A to ICTA 1988 (from 6 April 2003 – removal expenses to which section 271 of ITEPA 2003 applies)That is because they are specifically excepted from Class 1A NICs by regulation 40(4) of the SSCR 2001.