National Insurance Contributions Act 2015

• Citation: 2015 c. 5
• Sections: 83

Section 1 Zero-rate secondary Class 1 contributions for apprentices under 25

(1) SSCBA 1992 is amended as follows.

(2) In section 9 (calculation of secondary Class 1 contributions), in subsection (1A), after paragraph (a) insert—

(aa) if section 9B below (zero-rate secondary Class 1 contributions for certain apprentices) applies to the earnings, 0%;

(3) In section 9A (the age-related secondary percentage), after subsection (1) insert—

(1A) But this section does not apply to those earnings so far as section 9B below (zero-rate secondary Class 1 contributions for certain apprentices) applies to them.

(4) After section 9A insert—

Zero-rate secondary Class 1 contributions for certain apprentices

(9B)

(1) Where a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, this section applies to the earnings paid in the tax week, in respect of the employment in question, if the earner is a relevant apprentice in relation to that employment.

(2) An earner is a “ relevant apprentice ”, in relation to an employment, if the earner—

(a) is aged under 25, and

(b) is employed, in the employment, as an apprentice.

(3) For the purposes of this Act a person is still to be regarded as being liable to pay a secondary Class 1 contribution even if the amount of the contribution is £0 because this section applies to the earnings in question.

(4) The Treasury may by regulations provide that, in relation to relevant apprentices, there is to be for every tax year an upper secondary threshold for secondary Class 1 contributions.

That threshold is to be the amount specified for that year by regulations made by the Treasury.

(5) Subsections (4) and (5) of section 5 above (which confer power to prescribe an equivalent of a secondary threshold in relation to earners paid otherwise than weekly), and subsection (6) of that section as it applies for the purposes of those subsections, apply for the purposes of an upper secondary threshold in relation to relevant apprentices as they apply for the purposes of a secondary threshold.

(6) Subsection (7) applies if—

(a) a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above,

(b) the earnings paid in the tax week, in respect of the employment in question, exceed the current upper secondary threshold (or the prescribed equivalent) in relation to relevant apprentices, and

(c) the earner is a relevant apprentice in relation to the employment.

(7) This section does not apply to those earnings so far as they exceed that threshold (or the prescribed equivalent) (“the excess earnings”) and, accordingly, for the purposes of section 9(1) above the relevant percentage in respect of the excess earnings is the secondary percentage.

(8) But the Treasury may by regulations modify the effect of subsection (7) in a case in which the earner falls within an age group specified in column 1 of the table in section 9A(3) above.

(9) In subsection (2)(b) “apprentice” has such meaning as the Treasury may prescribe.

(10) The Treasury may by regulations amend subsection (2)(a) so as to alter the age that an earner must be in order to be a relevant apprentice (and regulations under this subsection may have the effect of allowing anyone who is of an age at which secondary Class 1 contributions are payable to be a relevant apprentice).

(5) In section 176(1)(a) (regulations subject to affirmative procedure), after “section 9A(7);” insert— “ section 9B(4), (8) or (10); ” .

(6) SSCB( NI )A 1992 is amended as follows.

(7) In section 9 (calculation of secondary Class 1 contributions), in subsection (1A), after paragraph (a) insert—

(aa) if section 9B below (zero-rate secondary Class 1 contributions for certain apprentices) applies to the earnings, 0%;

(8) In section 9A (the age-related secondary percentage), after subsection (1) insert—

(1A) But this section does not apply to those earnings so far as section 9B below (zero-rate secondary Class 1 contributions for certain apprentices) applies to them.

(9) After section 9A insert—

Zero-rate secondary Class 1 contributions for certain apprentices

(9B)

(1) Where a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, this section applies to the earnings paid in the tax week, in respect of the employment in question, if the earner is a relevant apprentice in relation to that employment.

(2) An earner is a “ relevant apprentice ”, in relation to an employment, if the earner—

(a) is aged under 25, and

(b) is employed, in the employment, as an apprentice.

(3) For the purposes of this Act a person is still to be regarded as being liable to pay a secondary Class 1 contribution even if the amount of the contribution is £0 because this section applies to the earnings in question.

(4) The Treasury may by regulations provide that, in relation to relevant apprentices, there is to be for every tax year an upper secondary threshold for secondary Class 1 contributions.

That threshold is to be the amount specified for that year by regulations made by the Treasury.

(5) Subsections (4) and (5) of section 5 above (which confer power to prescribe an equivalent of a secondary threshold in relation to earners paid otherwise than weekly), and subsection (6) of that section as it applies for the purposes of those subsections, apply for the purposes of an upper secondary threshold in relation to relevant apprentices as they apply for the purposes of a secondary threshold.

(6) Subsection (7) applies if—

(a) a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above,

(b) the earnings paid in the tax week, in respect of the employment in question, exceed the current upper secondary threshold (or the prescribed equivalent) in relation to relevant apprentices, and

(c) the earner is a relevant apprentice in relation to the employment.

(7) This section does not apply to those earnings so far as they exceed that threshold (or the prescribed equivalent) (“the excess earnings”) and, accordingly, for the purposes of section 9(1) above the relevant percentage in respect of the excess earnings is the secondary percentage.

(8) But the Treasury may by regulations modify the effect of subsection (7) in a case in which the earner falls within an age group specified in column 1 of the table in section 9A(3) above.

(9) In subsection (2)(b) “apprentice” has such meaning as the Treasury may prescribe.

(10) The Treasury may by regulations amend subsection (2)(a) so as to alter the age that an earner must be in order to be a relevant apprentice (and regulations under this subsection may have the effect of allowing anyone who is of an age at which secondary Class 1 contributions are payable to be a relevant apprentice).

(10) In section 172(11A) (regulations subject to affirmative procedure), after “9A(7),” insert “ section 9B (4), (8) or (10), ” .

(11) The amendments made by this section come into force—

(a) for the purposes of making regulations under section 9B of SSCBA 1992 or section 9B of SSCB(NI)A 1992, at the end of the period of 2 months beginning with the day on which this Act is passed, and

(b) for remaining purposes, on 6 April 2016.

Section 2 Reform of Class 2 contributions

Schedule 1 contains provision relating to Class 2 national insurance contributions.

Section 3 Consequential etc power

(1) The Treasury may by regulations make consequential, incidental or supplementary provision in connection with the provision made in Schedule 1.

(2) Regulations under this section may modify any provision of an Act or an instrument made under an Act.

(3) In subsection (2) “ modify ” includes amend, repeal or revoke.

(4) Section 175(3) to (5) of SSCBA 1992 (various supplementary powers) applies to the power to make regulations conferred by this section.

(5) Regulations under this section must be made by statutory instrument.

(6) A statutory instrument containing (with or without other provision) regulations under this section that amend or repeal a provision of an Act may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(7) A statutory instrument containing regulations under this section that does not have to be approved in draft under subsection (6) is subject to annulment in pursuance of a resolution of either House of Parliament.

Section 4 Application of Parts 4 and 5 of FA 2014 to national insurance contributions

(1) Part 1 of Schedule 2 applies Part 4 of FA 2014 (follower notices and accelerated payments) to Class 1, 1A, 1B and certain Class 2 contributions.

(2) Part 2 of that Schedule applies Part 5 of that Act (promoters of tax avoidance schemes) to Class 1, 1A, 1B and certain Class 2 contributions.

(3) Part 3 of that Schedule applies Parts 4 and 5 of that Act to Class 4 contributions.

(4) Part 4 of that Schedule contains commencement and transitory provision.

Section 5 Provision in consequence etc of tax-only changes to Part 4 or 5 of FA 2014

(1) Where a modification is made to Part 4 of FA 2014 (follower notices and accelerated payments) or Part 5 of that Act (promoters of tax avoidance schemes) that does not apply in relation to national insurance contributions (“the tax-only modification”), the Treasury may by regulations—

(a) make provision for the purpose of applying the tax-only modification in relation to national insurance contributions (with or without modifications),

(b) make provision in relation to national insurance contributions corresponding to the tax-only modification, or

(c) otherwise modify the Part concerned, as it has effect in relation to national insurance contributions, in consequence of, or for the purpose of making provision supplementary or incidental to, the tax-only modification.

(2) Regulations under this section—

(a) may amend, repeal or revoke any provision of an Act or instrument made under an Act (whenever passed or made),

(b) may make consequential, incidental, supplementary, transitional, transitory or saving provision, and

(c) may make different provision for different cases, classes of national insurance contributions or purposes.

(3) Regulations under this section must be made by statutory instrument.

(4) A statutory instrument containing (with or without other provision) regulations under this section that amend or repeal a provision of an Act may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(5) A statutory instrument containing regulations under this section that does not have to be approved in draft under subsection (4) is subject to annulment in pursuance of a resolution of either House of Parliament.

(6) In this section “ national insurance contributions ” means contributions under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992.

(7) This section comes into force at the end of the period of 2 months beginning with the day on which this Act is passed.

Section 6 Categorisation of earners etc: anti-avoidance

(1) In the Social Security (Categorisation of Earners) Regulations 1978 ( S.I. 1978/1689) (“ the 1978 GB regulations ”), after regulation 5 insert—

Anti-avoidance

(5A)

(1) Paragraph (2) applies if—

(a) an earner has an employment in which the earner personally provides services to a person who is resident or present or has a place of business in Great Britain,

(b) a third person enters into relevant avoidance arrangements, and

(c) but for paragraph (2), the earner would not be, and would not be treated as falling within the category of, an employed earner in relation to the employment.

(2) The earner is to be treated as falling within the category of an employed earner in relation to the employment.

(3) In paragraph (1)(b) “ relevant avoidance arrangements ” means arrangements the main purpose, or one of the main purposes, of which is to secure—

(a) that the earner is not treated under paragraph 2 of Schedule 1 as falling within the category of employed earner in relation to the employment, or

(b) that a person is not treated under paragraph 2 or 9(b) or (d) of Schedule 3 as the secondary Class 1 contributor in respect of payments of earnings to or for the benefit of the earner in respect of the employment.

(4) Paragraph (5) applies if—

(a) a person (“P”) enters into arrangements the main purpose, or one of the main purposes, of which is to secure that P is not treated under a relevant provision as the secondary Class 1 contributor in respect of payments of earnings to or for the benefit of an employed earner in respect of an employment, and

(b) but for paragraph (5), no person who is resident or present or has a place of business in Great Britain would—

(i) be the secondary Class 1 contributor in respect of such payments, or

(ii) be treated, under a provision other than paragraph 2(a) or (b) or 9(g) or (h) in column (B) of Schedule 3, as the secondary Class 1 contributor in respect of such payments.

(5) If P is resident or present or has a place of business in Great Britain, P is to be treated as the secondary Class 1 contributor in respect of such payments.

(6) In paragraph (4)(a) a “ relevant provision ” means any provision of—

(a) paragraph 2 of Schedule 3, other than sub-paragraphs (a) and (b) of that paragraph in column (B), or

(b) paragraph 9(a) to (d) of that Schedule.

(7) In this regulation “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(2) In the Social Security (Categorisation of Earners) Regulations (Northern Ireland) 1978 (S.R. (NI) 1978 No. 401) (“ the 1978 NI regulations ”), after regulation 5 insert—

Anti-avoidance

(5A)

(1) Paragraph (2) applies if—

(a) an earner has an employment in which the earner personally provides services to a person who is resident or present or has a place of business in Northern Ireland,

(b) a third person enters into relevant avoidance arrangements, and

(c) but for paragraph (2), the earner would not be, and would not be treated as falling within the category of, an employed earner in relation to the employment.

(2) The earner is to be treated as falling within the category of an employed earner in relation to the employment.

(3) In paragraph (1)(b) “ relevant avoidance arrangements ” means arrangements the main purpose, or one of the main purposes, of which is to secure—

(a) that the earner is not treated under paragraph 2 of Schedule 1 as falling within the category of employed earner in relation to the employment, or

(b) that a person is not treated under paragraph 2 or 7(b) or (d) of Schedule 3 as the secondary Class 1 contributor in respect of payments of earnings to or for the benefit of the earner in respect of the employment.

(4) Paragraph (5) applies if—

(a) a person (“P”) enters into arrangements the main purpose, or one of the main purposes, of which is to secure that P is not treated under a relevant provision as the secondary Class 1 contributor in respect of payments of earnings to or for the benefit of an employed earner in respect of an employment, and

(b) but for paragraph (5), no person who is resident or present or has a place of business in Northern Ireland would—

(i) be the secondary Class 1 contributor in respect of such payments, or

(ii) be treated, under a provision other than paragraph 2(a) or (b) or 7(g) or (h) in column (B) of Schedule 3, as the secondary Class 1 contributor in respect of such payments.

(5) If P is resident or present or has a place of business in Northern Ireland, P is to be treated as the secondary Class 1 contributor in respect of such payments.

(6) In paragraph (4)(a) a “ relevant provision ” means any provision of—

(a) paragraph 2 of Schedule 3, other than sub-paragraphs (a) and (b) of that paragraph in column (B), or

(b) paragraph 7(a) to (d) of that Schedule.

(7) In this regulation “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(3) In section 2 of SSCBA 1992 (categories of earner), after subsection (2) insert—

(2ZA) Regulations under subsection (2)(b) may make provision treating a person (“P”) as falling within one or other of the categories of earner in relation to an employment where arrangements have been entered into the main purpose, or one of the main purposes, of which is to secure—

(a) that P is not treated by other provision in regulations under subsection (2)(b) as falling within that category of earner in relation to the employment, or

(b) that a person is not treated as the secondary contributor in respect of earnings paid to or for the benefit of P in respect of the employment.

(2ZB) In subsection (2ZA) “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(4) In section 7 of SSCBA 1992 (“secondary contributor”), after subsection (2) insert—

(2A) Regulations under subsection (2) may make provision treating a person as the secondary contributor in respect of earnings paid to or for the benefit of an earner if arrangements have been entered into the main purpose, or one of the main purposes, of which is to secure that the person is not so treated by other provision in regulations under subsection (2).

(2B) In subsection (2A) “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(5) In section 2 of SSCB(NI)A 1992 (categories of earner), after subsection (2) insert—

(2ZA) Regulations under subsection (2)(b) may make provision treating a person (“P”) as falling within one or other of the categories of earner in relation to an employment where arrangements have been entered into the main purpose, or one of the main purposes, of which is to secure—

(a) that P is not treated by other provision in regulations under subsection (2)(b) as falling within that category of earner in relation to the employment, or

(b) that a person is not treated as the secondary contributor in respect of earnings paid to or for the benefit of P in respect of the employment.

(2ZB) In subsection (2ZA) “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(6) In section 7 of SSCB(NI)A 1992 (“secondary contributor”), after subsection (2) insert—

(2A) Regulations under subsection (2) may make provision treating a person as the secondary contributor in respect of earnings paid to or for the benefit of an earner if arrangements have been entered into the main purpose, or one of the main purposes, of which is to secure that the person is not so treated by other provision in regulations under subsection (2).

(2B) In subsection (2A) “arrangements” include any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations.

(7) Subsections (1) and (2)—

(a) are to be treated as having come into force on 6 April 2014 for the purposes of inserting regulation 5A(1) to (5), (6)(a) and (7), and

(b) come into force for the purposes of inserting regulation 5A(6)(b) on the day on which this Act is passed.

(8) Paragraphs (4) and (5) of regulation 5A have effect in relation to arrangements entered into on or after 6 April 2014 the main purpose, or one of the main purposes of which, is to secure that a person is not treated, under a provision mentioned in paragraph (6)(b) of that regulation, as the secondary Class 1 contributor in respect of payments of earnings to or for the benefit of an employed earner in respect of an employment.

(9) But regulation 5A(5) only applies as a result of arrangements mentioned in subsection (8) in relation to payments of earnings that are made on or after the day on which this Act is passed.

(10) In subsections (7) to (9) references to regulation 5A are to regulation 5A—

(a) inserted by subsection (1) into the 1978 GB regulations;

(b) inserted by subsection (2) into the 1978 NI regulations.

(11) The amendments made by subsections (1) and (2) are without prejudice to any power to make regulations amending or revoking the provision inserted.

Section 7 HMRC administrative expenses: financial provision

(1) In section 165 of SSAA 1992 (adjustments between the National Insurance Fund and Consolidated Fund)—

(a) in subsection (5)(a), for the words from “other” to “Act 2014” substitute “ relevant legislation ” ;

(b) after subsection (5A) insert—

(5B) In subsection (5)(a) “ relevant legislation ” means—

(a) legislation relating to ordinary statutory paternity pay, additional statutory paternity pay or statutory adoption pay,

(b) the National Insurance Contributions Act 2014, or

(c) the National Insurance Contributions Act 2015.

(2) In section 145 of SSA(NI)A 1992 (adjustments between the National Insurance Fund and Consolidated Fund)—

(a) in subsection (5)(a), for the words from “other” to “Act 2014” substitute “ relevant legislation ” ;

(b) after subsection (5A) insert—

(5B) In subsection (5)(a) “ relevant legislation ” means—

(a) legislation relating to ordinary statutory paternity pay, additional statutory paternity pay or statutory adoption pay,

(b) the National Insurance Contributions Act 2014, or

(c) the National Insurance Contributions Act 2015.

Section 8 Abbreviations of Acts

In this Act—

“ CRCA 2005 ” means the Commissioners for Revenue and Customs Act 2005;

“FA”, followed by a year, means the Finance Act of that year;

“JA 1995" means the Jobseekers Act 1995;

“ PA 2014 ” means the Pensions Act 2014;

“SSAA 1992" means the Social Security Administration Act 1992;

“ SSA(NI)A 1992 ” means the Social Security Administration (Northern Ireland) Act 1992;

“ SSCBA 1992 ” means the Social Security Contributions and Benefits Act 1992;

“ SSCB(NI)A 1992 ” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992;

“SSC(TF)A 1999 means the Social Security Contributions (Transfer of Functions, etc) Act 1999;

“ TMA 1970 ” means the Taxes Management Act 1970;

“ WRA 2007 ” means the Welfare Reform Act 2007;

“ WRA 2012 ” means the Welfare Reform Act 2012.

Section 9 Short title and extent

(1) This Act may be cited as the National Insurance Contributions Act 2015.

(2) Subject to subsection (3), this Act extends to England and Wales, Scotland and Northern Ireland.

(3) An amendment, repeal or revocation made by this Act has the same extent as the provision amended, repealed or revoked.

Section 1

SSCBA 1992 is amended as follows.

Section 2

In section 1 (outline of contributory system), in subsection (2)(c), omit “weekly”.

Section 3

For section 11 (liability for Class 2 contributions) substitute—

Class 2 contributions

(11)

(1) This section applies if an earner is in employment as a self-employed earner in a tax year (the “relevant tax year”).

(2) If the earner has relevant profits of, or exceeding, the small profits threshold, the earner is liable to pay Class 2 contributions for the relevant tax year at the rate of £2.80 in respect of each week in that year that the earner is in the employment.

(3) “ Relevant profits ” means profits, from the employment, in respect of which Class 4 contributions are payable under section 15 for the relevant tax year (or would be payable if the amount of the profits were to exceed the amount specified in subsection (3)(a) of that section in excess of which the main Class 4 percentage is payable).

(4) The “small profits threshold” is £5,965.

(5) Class 2 contributions under subsection (2) are to be payable in the same manner that Class 4 contributions in respect of relevant profits are, or would be, payable (but see section 11A for the application of certain provisions in relation to such Class 2 contributions).

(6) If the earner does not have relevant profits of, or exceeding, the small profits threshold, the earner may pay a Class 2 contribution of £2.80 in respect of any week in the relevant tax year that the earner is in the employment.

(7) No Class 2 contributions are to be paid under this section in respect of any week in the relevant tax year—

(a) before that in which the earner attains the age of 16, or

(b) after that in which the earner attains pensionable age.

(8) The Treasury may by regulations make provision so that, in relation to an earner, the Class 2 contribution in respect of a week is higher than that specified in subsections (2) and (6) where—

(a) in respect of any employment of the earner, the earner is treated by regulations made under section 2(2)(b) as being a self-employed earner, and

(b) in any period or periods the earner has earnings from that employment and—

(i) those earnings are such that (disregarding their amount) the earner would be liable for Class 1 contributions in respect of them if the earner were not so treated in respect of the employment, and

(ii) no Class 4 contribution is payable in respect of the earnings by virtue of regulations under section 18(1).

(9) The Treasury may by regulations—

(a) modify the meaning of “relevant profits”;

(b) provide that Class 2 contributions under subsection (6) may not be paid—

(i) if the employment or the earner is of a prescribed description, or

(ii) in prescribed circumstances.

(10) Regulations under subsection (9)(a) may amend this section.

(11) Regulations under subsection (9)(b) are to be made with the concurrence of the Secretary of State.

Application of certain provisions of the Income Tax Acts in relation to Class 2 contributions under section 11(2)

(11A)

(1) The following provisions apply, with the necessary modifications, in relation to Class 2 contributions under section 11(2) as if those contributions were income tax chargeable under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 in respect of profits of a trade, profession or vocation which is not carried on wholly outside the United Kingdom—

(a) Part 2 (returns), Part 4 (assessment and claims), Part 5 (appeals), Part 5A (payment of tax), Part 6 (collection and recovery) and Part 10 (penalties) of the Taxes Management Act 1970;

(b) Schedule 24 to the Finance Act 2007 (penalties for errors);

(c) sections 101 and 102 of the Finance Act 2009 (interest);

(d) Schedules 55 and 56 to that Act (penalties for failure to make returns etc or for failure to make payments on time);

(e) Part 4 (follower notices and accelerated payments) and Part 5 (promoters of tax avoidance schemes) of the Finance Act 2014;

(f) any other provisions of the Income Tax Acts as to assessment, collection, repayment or recovery.

(2) But section 59A of the Taxes Management Act 1970 (payments on account) does not apply in relation to Class 2 contributions under section 11(2).

(3) This section and section 11(5) are subject to any contrary provision in regulations made under Schedule 1 in relation to Class 2 contributions under section 11(2).

Section 4

(1) Section 12 (late paid Class 2 contributions) is amended as follows.

(2) In subsection (1), after “Class 2 contribution” insert “ under section 11(6) ” .

(3) In subsection (2), for “to (5)” substitute “ and (4) ” .

(4) In subsection (3), for “(4) to (6)” substitute “ (4) and (6) ” .

(5) Omit subsection (5).

(6) In subsection (6)—

(a) omit “or (5)”;

(b) in paragraph (a), omit “in a case falling within subsection (3) above,”;

(c) omit paragraph (b) and the word “and” preceding it.

(7) Omit subsection (7).

(8) In subsection (8)—

(a) in the definition of “ordinary contribution”, for “under section 11(1) above” substitute “ of the amount specified in section 11(6) ” ;

(b) in the definition of “higher-rate contribution”, for the words from “under regulations” to the end substitute “ of an amount provided for in regulations under section 11(8) ” .

Section 5

In section 18 (Class 4 contributions recoverable under regulations), in subsection (1)(b), for “subsection (3)” substitute “ subsection (8) ” .

Section 6

In section 35A (appropriate weekly rate of maternity allowance under section 35), in subsection (5)(c)—

(a) in sub-paragraph (i), after “she” insert “ has ” ;

(b) in sub-paragraph (ii), for “was excepted (under section 11(4) above) from liability for” substitute “ could have paid, but has not paid, ” .

Section 7

In section 35B (state maternity allowance for participating wife or civil partner of self-employed earner), in subsection (1)(c), for “is liable to pay” substitute “ has paid ” .

Section 8

In section 176(1)(a) (parliamentary control: instruments subject to affirmative procedure), for “section 11(3)” substitute “ section 11(8) or (9) ” .

Section 9

(1) Schedule 1 (supplementary provisions) is amended as follows.

(2) In paragraph 7B, omit sub-paragraph (7).

(3) After paragraph 7BA insert—

(7BB)

(1) Regulations may provide, in connection with maternity allowance under section 35 or 35B, for a person who is, or will be, either liable or entitled to pay a Class 2 contribution in respect of a week in a tax year to be able to pay a Class 2 contribution in respect of that week at any time in the period—

(a) beginning with that week, and

(b) ending with a prescribed date.

(2) The regulations may provide that where a person pays a Class 2 contribution in respect of a week in a tax year under the regulations—

(a) the contribution is to be treated, before the end of the tax year, as a Class 2 contribution under section 11(6);

(b) the contribution is to be treated, after the end of the tax year—

(i) if the person is liable under section 11(2) to pay a Class 2 contribution in respect of that week, as a Class 2 contribution under section 11(2);

(ii) otherwise, as a Class 2 contribution under section 11(6).

(3) Regulations under this paragraph are to be made by the Treasury acting with the concurrence of the Secretary of State.

(4) In paragraph 8(1), omit paragraphs (j) and (k).

Section 10

SSCB(NI)A 1992 is amended as follows.

Section 11

In section 1 (outline of contributory system), in subsection (2)(c), omit “weekly”.

Section 12

For section 11 (liability for Class 2 contributions) substitute—

Class 2 contributions

(11)

(1) This section applies if an earner is in employment as a self-employed earner in a tax year (the “relevant tax year”).

(2) If the earner has relevant profits of, or exceeding, the small profits threshold, the earner is liable to pay Class 2 contributions for the relevant tax year at the rate of £2.80 in respect of each week in that year that the earner is in the employment.

(3) “ Relevant profits ” means profits, from the employment, in respect of which Class 4 contributions are payable under section 15 for the relevant tax year (or would be payable if the amount of the profits were to exceed the amount specified in subsection (3)(a) of that section in excess of which the main Class 4 percentage is payable).

(4) The “small profits threshold” is £5,965.

(5) Class 2 contributions under subsection (2) are to be payable in the same manner that Class 4 contributions in respect of relevant profits are, or would be, payable (but see section 11A for the application of certain provisions in relation to such Class 2 contributions).

(6) If the earner does not have relevant profits of, or exceeding, the small profits threshold, the earner may pay a Class 2 contribution of £2.80 in respect of any week in the relevant tax year that the earner is in the employment.

(7) No Class 2 contributions are to be paid under this section in respect of any week in the relevant tax year—

(a) before that in which the earner attains the age of 16, or

(b) after that in which the earner attains pensionable age.

(8) The Treasury may by regulations make provision so that, in relation to an earner, the Class 2 contribution in respect of a week is higher than that specified in subsections (2) and (6) where—

(a) in respect of any employment of the earner, the earner is treated by regulations made under section 2(2)(b) as being a self-employed earner, and

(b) in any period or periods the earner has earnings from that employment and—

(i) those earnings are such that (disregarding their amount) the earner would be liable for Class 1 contributions in respect of them if the earner were not so treated in respect of the employment, and

(ii) no Class 4 contribution is payable in respect of the earnings by virtue of regulations under section 18(1).

(9) The Treasury may by regulations—

(a) modify the meaning of “relevant profits”;

(b) provide that Class 2 contributions under subsection (6) may not be paid—

(i) if the employment or the earner is of a prescribed description, or

(ii) in prescribed circumstances.

(10) Regulations under subsection (9)(a) may amend this section.

(11) Regulations under subsection (9)(b) are to be made with the concurrence of the Department.

Application of certain provisions of the Income Tax Acts in relation to Class 2 contributions under section 11(2)

(11A)

(1) The following provisions apply, with the necessary modifications, in relation to Class 2 contributions under section 11(2) as if those contributions were income tax chargeable under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 in respect of profits of a trade, profession or vocation which is not carried on wholly outside the United Kingdom—

(a) Part 2 (returns), Part 4 (assessment and claims), Part 5 (appeals), Part 5A (payment of tax), Part 6 (collection and recovery) and Part 10 (penalties) of the Taxes Management Act 1970;

(b) Schedule 24 to the Finance Act 2007 (penalties for errors);

(c) sections 101 and 102 of the Finance Act 2009 (interest);

(d) Schedules 55 and 56 to that Act (penalties for failure to make returns etc or for failure to make payments on time);

(e) Part 4 (follower notices and accelerated payments) and Part 5 (promoters of tax avoidance schemes) of the Finance Act 2014;

(f) any other provisions of the Income Tax Acts as to assessment, collection, repayment or recovery.

(2) But section 59A of the Taxes Management Act 1970 (payments on account) does not apply in relation to Class 2 contributions under section 11(2).

(3) This section and section 11(5) are subject to any contrary provision in regulations made under Schedule 1 in relation to Class 2 contributions under section 11(2).

Section 13

(1) Section 12 (late paid Class 2 contributions) is amended as follows.

(2) In subsection (1), after “Class 2 contribution” insert “ under section 11(6) ” .

(3) In subsection (2), for “to (5)” substitute “ and (4) ” .

(4) In subsection (3), for “(4) to (6)” substitute “ (4) and (6) ” .

(5) Omit subsection (5).

(6) In subsection (6)—

(a) omit “or (5)”;

(b) in paragraph (a), omit “in a case falling within subsection (3) above,”;

(c) omit paragraph (b) and the word “and” preceding it.

(7) Omit subsection (7).

(8) In subsection (8)—

(a) in the definition of “ordinary contribution”, for “under section 11(1) above” substitute “ of the amount specified in section 11(6) ” ;

(b) in the definition of “higher-rate contribution”, for the words from “under regulations” to the end substitute “ of an amount provided for in regulations under section 11(8) ” .

Section 14

In section 18 (Class 4 contributions recoverable under regulations), in subsection (1)(b), for “subsection (3)” substitute “ subsection (8) ” .

Section 15

In section 35A (appropriate weekly rate of maternity allowance under section 35), in subsection (5)(c)—

(a) in sub-paragraph (i), after “she” insert “ has ” ;

(b) in sub-paragraph (ii), for “was excepted (under section 11(4) above) from liability for” substitute “ could have paid, but has not paid, ” .

Section 16

In section 35B (state maternity allowance for participating wife or civil partner of self-employed earner), in subsection (1)(c), for “is liable to pay” substitute “ has paid ” .

Section 17

In section 172(11A) (instruments subject to Parliamentary affirmative procedure), for “11(3)” substitute “ 11(8) or (9) ” .

Section 18

(1) Schedule 1 (supplementary provisions) is amended as follows.

(2) In paragraph 7B, omit sub-paragraph (7).

(3) After paragraph 7BA insert—

(7BB)

(1) Regulations may provide, in connection with maternity allowance under section 35 or 35B, for a person who is, or will be, either liable or entitled to pay a Class 2 contribution in respect of a week in a tax year to be able to pay a Class 2 contribution in respect of that week at any time in the period—

(a) beginning with that week, and

(b) ending with a prescribed date.

(2) The regulations may provide that where a person pays a Class 2 contribution in respect of a week in a tax year under the regulations—

(a) the contribution is to be treated, before the end of the tax year, as a Class 2 contribution under section 11(6);

(b) the contribution is to be treated, after the end of the tax year—

(i) if the person is liable under section 11(2) to pay a Class 2 contribution in respect of that week, as a Class 2 contribution under section 11(2);

(ii) otherwise, as a Class 2 contribution under section 11(6).

(3) Regulations under this paragraph are to be made by the Treasury acting with the concurrence of the Department.

(4) In paragraph 8(1), omit paragraphs (j) and (k).

Section 19

SSAA 1992 is amended as follows.

Section 20

In section 141 (annual review of contributions), in subsection (4)—

(a) in paragraph (a), for “section 11(1)” substitute “ section 11(2) and (6) ” ;

(b) in paragraph (b), for the words from “amount” to the end substitute “ small profits threshold for the purposes of Class 2 contributions ” .

Section 21

(1) Section 143 (power to alter contributions with a view to adjusting the level of the National Insurance Fund) is amended as follows.

(2) In subsection (1)(c), for “section 11(1)” substitute “ section 11(2) and (6) ” .

(3) In subsection (3)—

(a) for “section 11(1)” substitute “ section 11(2) and (6) ” ;

(b) for the words from “amount” to the end substitute “ small profits threshold for the purposes of Class 2 contributions ” .

Section 22

In section 145 (power to alter primary and secondary contributions), in subsection (4)(a)—

(a) for “section 11(1)” substitute “ section 11(2) and (6) ” ;

(b) omit “in that subsection”.

Section 23

SSC(TF)A 1999 is amended as follows.

Section 24

In section 4 (recovery of contributions where income tax recovery provisions not applicable)—

(a) in paragraph (a), for “, Class 1B and Class 2” substitute “ and Class 1B ” ;

(b) after paragraph (a) insert—

(aa) those Class 2 contributions in relation to which—

(i) the regulations mentioned in paragraph (a), and

(ii) Part 6 of the Taxes Management Act 1970 (collection and recovery),

do not apply,

Section 25

In section 8 (decisions by officers of HMRC), after subsection (1) insert—

(1A) No decision in respect of Class 2 contributions under section 11(2) of the Social Security Contributions and Benefits Act 1992 may be made under subsection (1) in relation to an issue specified in paragraph (c) or (e) of that subsection if the person to whom the decision would relate—

(a) has appealed under Part 5 of the Taxes Management Act 1970 in relation to that issue,

(b) can appeal under that Part in relation to that issue, or

(c) might in the future, without the agreement of Her Majesty's Revenue and Customs or permission of the tribunal, be able to appeal under that Part in relation to that issue.

Section 26

In Schedule 3 (transfer of other functions to the Treasury or Board), omit paragraph 12.

Section 27

In Schedule 9 (further consequential amendments), omit paragraphs 3 and 7(7).

Section 28

The Social Security Contributions (Transfer of Functions, etc) (Northern Ireland) Order 1999 is amended as follows.

Section 29

In Article 7 (decisions by officers of HMRC), after paragraph (1) insert—

(1A) No decision in respect of Class 2 contributions under section 11(2) of the Contributions and Benefits Act may be made under paragraph (1) in relation to an issue specified in sub-paragraph (c) or (e) of that paragraph if the person to whom the decision would relate—

(a) has appealed under Part 5 of the Taxes Management Act 1970 in relation to that issue,

(b) can appeal under that Part in relation to that issue, or

(c) might in the future, without the agreement of Her Majesty's Revenue and Customs or permission of the tribunal, be able to appeal under that Part in relation to that issue.

Section 30

In Schedule 3 (transfer of other functions to the Treasury or Board), omit paragraph 13.

Section 31

In Schedule 8 (further consequential amendments), omit paragraphs 1 and 5(7).

Section 32

The Social Security (Contributions) Regulations 2001 are amended as follows.

Section 33

(1) In regulation 125 (share fishermen), in paragraph (c), for “section 11(1) of the Act (Class 2 contributions), be £3.40” substitute “ section 11(2) and (6) of the Act (Class 2 contributions), be £3.45 ” .

(2) The amendment made by sub-paragraph (1) is without prejudice to any power to make regulations amending or revoking the provision amended.

Section 34

(1) In regulation 127 (elections by married women and widows), in paragraph (3)(b), after “Class 2 contribution” insert “ , nor shall she be entitled to pay any such contribution, ” .

(2) The amendment made by sub-paragraph (1) is without prejudice to any power to make regulations amending or revoking the provision inserted.

Section 35

The amendments made by this Schedule, other than those mentioned in paragraph 36, have effect for the tax year 2015-16 and subsequent tax years.

Section 36

The amendments made by paragraphs 4, 9(2), 13, 18(2), 27 and 31 have effect in relation to a Class 2 contribution in respect of a week in the tax year 2015-16 or a subsequent tax year.

Section 37

The Treasury may by regulations made by statutory instrument make transitional or transitory provision or savings in connection with the coming into force of any of the amendments made by this Schedule.

Section 1

Part 4 of FA 2014 (follower notices and accelerated payments) has effect with the following modifications.

Section 2

References to tax or a relevant tax, other than references to particular taxes, include relevant contributions.

Section 3

References to a charge to tax include a liability to pay relevant contributions and references to a person being chargeable to tax, or to tax being charged, are to be construed accordingly.

Section 4

References to an assessment to tax include a NICs decision relating to a person's liability for relevant contributions.