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HMRC internal manual

National Insurance Manual

Class 1A National Insurance contributions: Special Class 1A NICs cases: Workers going or coming from abroad provided with benefits: Calculating the amount of Class 1A NICs due

When UK NICs legislation either starts or ceases to apply to workers coming from or going abroad part way through a tax year, liability for Class 1 NICs and Class 1A NICs, starts or ceases at that time. In such cases calculate the amount of Class 1A NICs due by apportioning the benefit between the period for which liability exists and the period for which no liability exists.


A posted worker from South Africa arrives in the UK on 26 September 2005. The UK subsidiary employer supplies the worker with a company car that is chargeable to UK tax. By virtue of regulation 145(2) of the SS(C)R 2001, there is no UK NICs liability for the first 52 contribution weeks. Liability for Class 1 NICs commences on the 24 September 2006. The amount of Class 1A NICs payable in respect of the car is calculated on a proportion of the cash equivalent of the car based on the number of days in the tax year that the employee is liable to UK NICs legislation. For the tax year 2005/06 - no Class 1A NICs are due

For the tax year 2006/2007, Class 1A NICs are due for the period 24 September to 5 April 2007 – 194 days.

Cash equivalent of the benefit £7,000

Pro-rata cash equivalent £7,000 x 194/365 = £3,720.55