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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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NICs avoidance: employment income provided through third parties: treating employment income as earnings

Regulation 22B of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)

This regulation treats the amount which counts as employment income of the employed earner (under Part 7A of ITEPA 2003) as remuneration derived from an employed earner’s employment. So, remuneration is treated as earnings paid on the same date that the amount is treated as employment income. When assessing Class 1 NICs, the amount treated as earnings must be added to any other earnings paid in the same earnings period.

The NICs rules build on the income tax rules. To consider whether NICs are due, look at the income tax position first.

HMRC has published comprehensive guidance on the income tax rules (including illustrative examples) in the Employment Income Manual at EIM45000 onwards.

For a glossary of technical terms used in the income tax guidance (some of which are also used in this part of National Insurance Manual) see EIM45010.