NICs avoidance: employment income provided through third parties: Employer Financed Retirement Benefit Schemes - relevant step related to disregarded earnings
A relevant step may arise under Part 7A of ITEPA 2003, which is
- related to a payment that is or will be disregarded from earnings for NICs purposes under Part 6, and
- not the actual payment disregarded from earnings for NICs purposes under Part 6.
In such cases the amount which counts as employment income is treated as remuneration derived from an employment and, therefore, as earnings for Class 1 NICs purposes. Part 6 does not apply to the amount treated as earnings, so that amount must be included in gross earnings when assessing Class 1 NICs. For an example, see NIM53050.
For guidance about what a relevant step is, see EIM45010.
For guidance about when Class 1 NICs liability may arise on an amount treated as employment income under Part 7A of ITEPA 2003, see NIM52150.