The Social Security (Contributions) Regulations 2001

• Citation: S.I. 2001/1004
• Sections: 543

Section 1 Citation, commencement and interpretation

(1) These Regulations may be cited as the Social Security (Contributions) Regulations 2001 and shall come into force on 6th April 2001 immediately after—

(a) the Social Security (Contributions) (Amendment No. 2) Regulations 2001 ;

(b) the Social Security (Contributions) (Amendment No. 2) (Northern Ireland) Regulations 2001 ;

(c) the Social Security (Contributions) (Amendment No. 3) Regulations 2001 ;

(d) the Social Security (Contributions) (Amendment No. 3) (Northern Ireland) Regulations 2001 ;

(e) the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations 2001) ; and

(f) the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations (Northern Ireland) 2001 .

(2) In these Regulations, unless the context otherwise requires—

“ the acquired gender ” has the same meaning as it has in the Gender Recognition Act 2004;

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

“the Administration Act” means the Social Security Administration Act 1992 ;

“ advance payment ” for the purposes of regulation 7 and paragraph 21AE of Schedule 4 means a payment of earnings that—

is not made at a regular interval,

is for an amount that would otherwise be included in the payment at the next regular interval that follows the making of the payment of earnings, and

does not exceed the amount that, at the time that payment of earnings is made, reasonably represents completed service in respect of which no other payment of earnings has been made;

“aggregation” means the aggregating and treating as a single payment under paragraph 1(1) of Schedule 1 to the Act (Class 1 contributions; more than one employment) of two or more payments or earnings and “aggregated” shall be construed accordingly;

“apportionment” means the apportioning under paragraph 1(7) of Schedule 1 to the Act to one or more employers of a single payment of earnings made to or for the benefit of an employed earner in respect of two or more employments, or, as the case may be, the apportioning under paragraph 1(8) of that Schedule of contribution liability between two or more employers in respect of earnings which have been aggregated under paragraph 1(1)(b) of that Schedule, and in either case “apportioning” and “apportioned” shall be construed accordingly;

“ approved method of electronic communications ” in relation to the delivery of information or the making of a payment in accordance with a provision of these Regulations, means a method of electronic communications which has been approved, by specific or general directions issued by the Board, for the delivery of information of that kind or the making of a payment of that kind under that provision;

“the Board” means the Commissioners of Inland Revenue, and subject to section 4A of the Inland Revenue Regulation Act 1890 , includes any officer or servant of theirs;

“ business travel ” has the meaning given in section 236(1) of ITEPA 2003 and includes journeys which are treated as business travel by section 235A of ITEPA 2003 (journeys made by members of local authorities etc). ;

“ cash voucher ” has the meaning given to it in section 75 of ITEPA 2003;

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“company” means a company within the meaning of section 1 of the Companies Act 2006 or a body corporate to which, by virtue of regulations made under section 1043 of that Act , any provision of that Act applies;

“ completed service ” means work undertaken or obligations performed by the earner in accordance with the earner’s contract with the employer;

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“conditional interest in shares” means an interest which is conditional for the purposes of Chapter 2 of Part 7 of ITEPA 2003 as originally enacted;

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“contribution week” means a period of seven days beginning with midnight between Saturday and Sunday;

“contribution year” shall be construed in accordance with section 12(1) or (as the case requires) section 13(5) of the Act (late paid Class 2 or Class 3 contributions);

“contribution-based jobseeker’s allowance” means an allowance under the Jobseekers Act 1995 as amended by the provisions of Part 1 of Schedule 14 to the Welfare Reform Act 2012 that remove references to an income-based allowance, and a contribution-based allowance under the Jobseekers Act 1995 as that Act has effect apart from those provisions;

“contributory benefit” includes a contribution-based jobseeker’s allowance but not an income-based jobseeker’s allowance;

“controller” means the person who controls the disbursement of any money raised by an independent sporting testimonial committee to or for the benefit of an individual who is or has been employed as a professional sports person;

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“director” means—

in relation to a company whose affairs are managed by a board of directors or similar body, a member of that board or similar body;

in relation to a company whose affairs are managed by a single director or similar person, that director or person; and

any person in accordance with whose directions or instructions the company’s directors as defined in paragraphs (a) and (b) above are accustomed to act; and for this purpose a person is not to be treated as such a person by reason only that the directors act on advice given by him in his professional capacity;

“due date” in Part 6 means, in relation to—

any Class 1 contribution, the date by which payment falls to be made;

any Class 2 contribution which a person is liable or entitled to pay, the 31st January following the end of the tax year in respect of which it is paid or payable; and

any Class 3 contribution, the date 42 days after the end of the year in respect of which it is paid.

“earnings period” means the period referred to in regulation 2;

“earnings-related contributions” means contributions payable under the Act in respect of earnings paid to or for the benefit of an earner in respect of employed earner’s employment;

“electronic communications” includes any communications conveyed by means of an electronic communications network.

employment and support allowance” has the same meaning as in the Welfare Reform Act 2007;

“ full gender recognition certificate ” means a certificate issued under section 4 of the Gender Recognition Act 2004;

“ HMRC ” means Her Majesty's Revenue and Customs; and

“an income-based jobseeker’s allowance” has the same meaning as in the Jobseekers Act 1995;

“independent sporting testimonial committee” means a committee which acts independently of the secondary contributor in organising a sporting testimonial and making the sporting testimonial payment;

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“national insurance number” means the national insurance number allocated within the meaning of regulation 9 of the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations 2001;

“ non-cash voucher ” has the meaning given to it in section 84 of ITEPA 2003;

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“ official computer system ” means a computer system maintained by or on behalf of the Board;

“optional remuneration arrangements” has the meaning given in section 69A of ITEPA 2003;

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“ the PAYE Regulations ” means the Income Tax (Pay As You Earn) Regulations 2003;

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“profits or gains” for the purposes of Part 8 means profits or gains which, subject to the provisions of Schedule 2 to the Act, are chargeable to income tax under Case I or Case II of Schedule D;

“readily convertible asset” has the meaning given in section 702 of ITEPA 2003 as amended by the Finance Act 2003;

“ reduced regular interval payment ” means a payment of earnings made at a regular interval that has been reduced by reference to advance payments made to the earner;

“registered pension scheme” has the meaning given in section 150(2) of the Finance Act 2004;

“regular interval” for the purposes of regulations 3, 4 and 7 includes only such interval as is in accordance with an express or implied agreement between the employed earner and the secondary contributor as to the intervals at which payments of earnings normally fall to be made, being intervals of substantially equal length;

“relevant employment income” has the meaning given in paragraph 3B(1A) of Schedule 1 to the Act ;

“restricted securities” and “restricted interest in securities” have the meanings given in sections 423 and 424 of ITEPA 2003 as substituted by the Finance Act 2003;

“retirement benefits scheme” has the meaning given in section 611 of the Taxes Act ;

“retrospective contributions”, in relation to an amount of retrospective earnings, means the amount of earnings-related contributions based on those earnings which the employee is liable to pay under section 6(4)(a) of the Act (primary contributions);

“retrospective contributions regulations” means regulations made by virtue of section 4B(2) of the Act and, in relation to an amount of retrospective earnings, “the relevant retrospective contributions regulations” means the regulations which treat that amount as earnings;

“retrospective earnings” means an amount retrospectively treated as earnings by retrospective contributions regulations;

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“secondary contributor” means the person who, in respect of earnings from employed earner’s employment, is liable to pay a second Class 1 contribution under section 6(4)(b) of the Act (liability for Class 1 contributions) ;

“securities” and “securities option” have the meaning given by section 420 of ITEPA 2003 as substituted by the Finance Act 2003;

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“serving member of the forces” means a person, other than one mentioned in Part 2 of Schedule 6, who, being over the age of 16, is a member of any establishment or organisation specified in Part I of that Schedule (being a member who gives full pay service) but does not include any such person while absent on desertion;

“sporting testimonial” and “sporting testimonial payment” have the meanings given by section 226E of ITEPA 2003;

“the Taxes Act” means the Income and Corporation Taxes Act 1988 ;

“ tax month ” has the meaning given in paragraph 1(2) of Schedule 4;

“termination award” means a payment or benefit received by an earner, or an earner’s spouse, civil partner, blood relative or dependent, in connection with the termination of the earner’s employment;

“training” means full-time training at a course approved by the Board;

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

“ tribunal ” means the First-tier tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

“week” means tax week, except in relation to Case C of Part 9, where “week” and “weekly” have the meanings given in regulation 115;

“the Welfare Reform Act” means the Welfare Reform and Pensions Act 1999 ;

“year” means tax year;

“year of assessment” has the meaning given to it in section 832(1) of the Taxes Act;

(3) For the purposes of regulations 52, 57, 67 and 116, references to “contributions”, “Class 1 contributions” and “earnings-related contributions” shall, unless the context otherwise requires, include any amount paid on account of earnings-related contributions in accordance with regulation 8(6).

(3A) In these Regulations, references to—

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

(b) Schedule 55 to the Finance Act 2009 (penalties for failure to make a return)

include references to these Schedules as amended by paragraphs 3 and 5 of Schedule 33 to the Finance Act 2014 (Part 4: Consequential Amendments).

(4) Where, by any provision of these Regulations—

(a) any notice or other document is required to be given or sent to the Board, that notice or document shall be treated as having been given or sent on the day that it is received by the Board; and

(b) any notice or other document is required to be given or sent by the Board to any person, that notice or document shall, if sent by post to that person’s last known address, be treated as having been given or sent on the day that is was posted.

(5) Unless the context otherwise requires—

(a) any reference in these Regulations to a numbered regulation is a reference to the regulation bearing that number in these Regulations;

(b) any reference in these Regulations to a numbered Part or Schedule is to the Part of, or Schedule to, these Regulations bearing that number;

(c) any reference in a regulation or a Schedule to a numbered paragraph is a reference to the paragraph bearing that number in that regulation or Schedule;

(d) any reference in a paragraph of a regulation or a Schedule to a numbered or lettered sub-paragraph is a reference to the sub-paragraph bearing that number or letter in that paragraph; and

(e) any reference in a sub-paragraph to a numbered head is a reference to the head in that sub-paragraph bearing that number.

Section 2 Earnings periods

Except where regulation 8 applies, the amount, if any, of earnings-related contributions payable or, where section 6A of the Act applies, treated as having been paid, in respect of earnings paid to or for the benefit of an earner in respect of an employed earner’s employment shall, subject to regulations 7 and 12 to 19, be assessed on the amount of such earnings paid, or treated as paid, in the earnings period specified in regulation 3, 4, 5, 6, or 9.

Section 3 Earnings period for earnings normally paid or treated as paid at regular intervals

(1) If any part of earnings paid to or for the benefit of an earner is normally paid, or is treated under regulation 7 as paid, at regular intervals, the earnings period in respect of those earnings shall be the period found in accordance with the following Table, subject to paragraphs (2) to (6).

Earnings Periods

(2) In any year, the earnings period for the earnings mentioned in paragraph (1) shall only be that found by the Table in that paragraph if the period in which the earnings are paid is one of a succession of periods and—

(a) the periods are the same length;

(b) the first period begins on the first day of the year; and

(c) the subsequent periods begin immediately after the end of the preceding period.

For the purpose of this paragraph, if all the periods in the succession mentioned above, apart from the last in the year in question, are the same length, the last period in the year shall be treated as if it were the same length as the others.

(2A) Paragraph (2B) applies if it appears to an officer of the Board that—

(a) it is the employer’s practice to pay the greater part of the earnings referred to in paragraph (2) at intervals of greater length than the shorter or shortest of the earnings periods produced by the application of that paragraph; and

(b) that practice is likely to continue.

(2B) If this paragraph applies the officer may, and if requested to do so by the earner or the secondary contributor shall, decide whether to give a notice to the earner and the secondary contributor specifying the longer or longest of the earnings periods produced by the application of paragraph (2) to be the earnings period applicable to those earnings.

(2C) A notice under paragraph (2B) shall—

(a) be given to both the earner and the secondary contributor; and

(b) specify the date from which the change of earnings period is to take effect.

The date specified shall not be earlier than that on which the notice is given.

(2D) A notice given under paragraph (2B) shall have effect until an officer of the Board decides (either of his own motion or on an application by the earner or the secondary contributor) that the practice to which it relates has ceased.

If an officer of the Board decides that a notice is to cease to have effect, he shall notify the earner and the secondary contributor accordingly.

(3) If the length of the earnings period determined in accordance with paragraph (2B) is a year, then notwithstanding paragraph (2) , where the change in the length of the earnings period takes effect during the course of a year, the length of the earnings period in respect of any earnings in that year which are paid or treated as paid on or after the change shall be the number of weeks remaining in that year commencing with the week in which the change takes effect.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Where—

(a) the employment in respect of which the earnings are paid has ended;

(b) the employment in respect of which the earnings are paid was one in which, during its continuance, earnings were paid or treated under regulation 7 as paid at a regular interval; and

(c) after the end of the employment, a payment of earnings is made which satisfies either or both of the conditions specified in paragraph (6),

the earnings period in respect of such payment of earnings shall, notwithstanding regulation 7, be the week in which the payment is made.

(6) The conditions referred to in paragraph (5) are that the payment is—

(a) by way of addition to a payment made before the end of the employment; and

(b) not in respect of a regular interval.

Section 4 Earnings period for earnings normally paid otherwise than at regular intervals and not treated as paid at regular intervals

Subject to regulation 3(5) or regulation 5, where earnings are paid to or for the benefit of an earner in respect of an employed earner’s employment, but no part of those earnings is normally paid or treated under regulation 7 as paid at regular intervals, the earnings period in respect of those earnings shall be a period of one of the following lengths—

(a) the length of the period of that part of the employment for which the earnings are paid or a week, whichever is the longer; or

(b) where it is not reasonably practicable to determine that period under paragraph (a)—

(i) the length of the period from the date on which the last payment of earnings, before the payment in question, was paid during the employment in respect of the employment (or, if there has been no such payment, from the date on which the employment began) to the date of the payment in question, unless the period so calculated would be of a length less than that of a week, in which case the earnings period shall be a week, or

(ii) where the payment is made before the employment begins or after it ends, a week.

Section 5 Earnings period for sums deemed to be earnings by virtue of regulations made under section 112 of the Act

Where any sum or amount is deemed to be earnings by virtue of any regulations made under section 112 of the Act (sums to be earnings for the purposes of Part I to V of the Act) —

(a) the earnings period in respect of any payment of those earnings shall be the length of the protected period (as referred to in section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 ) or, as the case may be, that part of it in respect of which the sum is paid, or a week whichever is the longer;

(b) contributions paid in respect of such earnings shall, if the employed earner so requests—

(i) if the period to which the payment of earnings relates falls wholly in a year other than the year in which they are paid, be treated as paid in respect of the year in which the period to which the payment of earnings relates falls, or

(ii) if the period to which the payment of earnings relates falls partly in the year in which they are paid and partly in one or more other years, be treated as paid proportionately in respect of each of the years in which the period to which the payment of earnings relates falls, or

(iii) if the period to which the payment of earnings relates falls wholly in two or more years other than the year in which they are paid, be treated as paid proportionately in respect of each of the years in which the period to which the payment of earnings relates falls.

Section 6 Earnings period for earnings to be aggregated where the earnings periods for those earnings otherwise would be of different lengths

(1) Paragraphs (2) and (3) apply where—

(a) earnings paid in respect of two or more employed earner’s employments fall to be aggregated; and

(b) the earnings periods in respect of those earnings are, by virtue of regulation 3, 4 or 5, of different lengths.

(2) In a case to which this regulation applies, where (but for its provisions) the earnings period in respect of earnings derived from any of the employments is of a different length from the designated earnings period, the earnings period in respect of any payment of those earnings shall be the designated earnings period.

(3) In this regulation “the designated earnings period” means the shorter, or as the case may be the shortest, of the earnings periods in respect of earnings derived from such employments.

Section 7 Treatment of earnings paid otherwise than at regular intervals

(1) Subject to regulation 3(5) and paragraphs (2) and (3), for the purposes of assessing earnings-related contributions—

(a) if on any occasion a payment of earnings which would normally fall to be made at regular interval is made otherwise than at the regular interval, it shall be treated as if it were a payment made at that regular interval;

(b) if payments of earnings are made at irregular intervals which secure that one and only one payment is made in each of a succession of periods consisting of the same number of days, weeks or calendar months, those payments shall be treated as if they were payments made at the regular interval of one of those periods of days, weeks or, as the case may be, calendar months;

(c) if payments of earnings, other than those specified in sub-paragraph (b), are made in respect of regular intervals, but otherwise than at regular intervals, each such payment shall be treated as made at the regular interval in respect of which it is due.

(2) Where under paragraph (1) a payment of earnings is treated as made at a regular interval, it shall for the purposes of assessment under these regulations of earnings-related contributions also be treated as paid—

(a) in a case falling within paragraph (1)(a), on the date on which it would normally have fallen to be made;

(b) in any other case, on the last day of the regular interval at which it is treated as paid.

(3) Subject to paragraph (3A) paragraphs (1) and (2) shall not apply to a payment of earnings made in one year where by virtue of those paragraphs that payment would be treated as made in another year.

(3A) Paragraph (3) does not apply in a case falling within paragraph (1)(a) where—

(a) the regular interval at which payment of earnings would normally fall to be made is no shorter than a week and no longer than a month,

(b) an advance payment is made to the earner, and

(c) a reduced regular interval payment is made to the earner.

(4) Notwithstanding regulation 15, a payment to which paragraph (3) applies (“the relevant payment”) shall not be aggregated with any other earnings unless—

(a) other earnings to which paragraphs (1) to (2) do not apply by virtue only of paragraph (3) are paid in the earnings period in which the relevant payment falls; and

(b) those other earnings would have been aggregated with the relevant payment had paragraph (3) not applied.

(5) A relevant payment shall be aggregated only with the other earnings specified in paragraph (4).

Section 8 Earnings periods for directors

(1) Where a person is, or is appointed, or ceases to be a director of a company during any year the amount, if any, of earnings-related contributions payable in respect of earnings paid to or for the benefit of that person in respect of any employed earner’s employment with that company shall, subject to regulations 12 and 14 to 17, be assessed on the amount of all such earnings paid (whether or not paid weekly) in the earnings periods specified in paragraphs (2) to (5).

(2) Where on one or more than one occasion a person is appointed a director of a company during the course of a year the earnings period in respect of such earnings as are paid in so much of the year as remains in the period commencing with the week in which he is appointed or, as the case may be, first appointed shall be the number of weeks in that period.

(3) Where a person is a director of a company at the beginning of a year the earnings period in respect of such earnings shall be that year, whether or not he remains such a director throughout that year.

(4) Where the earnings paid in respect of two or more employed earner’s employments fall to be aggregated and the earnings periods in respect of those earnings would be of different lengths, then—

(a) if those periods are determined only by paragraphs (1) to (3); or

(b) if the length of one or more of those periods is determined by those paragraphs and the length of one or more of the others is determined by any other provision of these Regulations,

the earnings period in respect of all those earnings shall be the period determined by those paragraphs or, where there is more than one such period, the longer or longest period so determined.

(5) Where a person is no longer a director of a company and, in any year after that in which he ceased to be a director of that company, he is paid earnings in respect of any period during which he was such a director, then—

(a) notwithstanding regulation 15, those earnings shall not be aggregated with any other earnings with which they would otherwise fall to be aggregated; and

(b) the earnings period in respect of those earnings shall be the year in which they are paid.

(6) Without prejudice to the paragraphs (1) to (5), a director and any company employing him may pay on account of any earnings-related contributions that may become payable by them such amounts as would be payable by way of such contributions if those paragraphs did not apply.

(7) If a full gender recognition certificate is issued under the Gender Recognition Act 2004 to a person aged at least 60 but not more than 64—

(a) whose gender before its issue was female; and

(b) whose acquired gender is male;

the periods in the year of issue respectively falling before and after its issue shall be treated, for the purpose of computing liability for primary Class 1 contributions, as separate earnings periods.

Section 9

(1) In this regulation the expression “week”—

(a) in paragraph (2)(a); and

(b) in paragraph (2)(b) where it first occurs,

has the same meaning as in section 171(1) of the Act.

(2) If the Board make a payment of statutory maternity pay, statutory paternity pay , statutory shared parental pay , statutory adoption pay or statutory parental bereavement pay , statutory parental bereavement pay or statutory neonatal care pay under regulations made under the relevant provision—

(a) that payment of statutory maternity pay, statutory paternity pay , statutory shared parental pay or statutory adoption pay , statutory adoption pay or statutory parental bereavement pay , statutory parental bereavement pay or statutory neonatal care pay (as the case may be) shall not be aggregated with any other earnings; and

(b) the earnings period in respect of that payment for any week shall be a week.

(2A) In paragraph (2) “the relevant provision” means—

(a) in relation to statutory maternity pay, section 164(9)(b),

(b) in relation to ... statutory paternity pay, section 171ZD(3),

(ba) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) in relation to statutory adoption pay, section 171ZM(3), ...

(d) in relation to statutory shared parental pay, section 171ZX(3), and

(e) in relation to statutory parental bereavement pay, section 171ZZ8(3), and

(f) in relation to statutory neonatal care pay, section 171ZZ18(3),

of the Act (liability to make payments of the relevant statutory pay to be that of the Board).

(3) If the Board make a payment of statutory sick pay under regulations made under section 151(6) of the Act (circumstances in which the Board are liable to pay statutory sick pay), the earnings period for that payment shall be—

(a) a period of the same length as the period in respect of which the payment is made, or

(b) a week,

whichever is the longer.

Section 10 Earnings limits and thresholds

For the purposes of sections 5(1) , 9A and 9B of the Act (earnings limits and thresholds to be specified for each tax year in respect of Class 1 contributions), for the tax year which begins on 6th April 2025 —

(a) the lower earnings limit (for primary Class 1 contributions) shall be £125 ;

(b) the upper earnings limit (for primary Class 1 contributions) shall be £967 ;

(c) the primary threshold (for primary Class 1 contributions) shall be £242 ; ...

(d) the secondary threshold (for secondary Class 1 contributions) shall be £96 ; ...

(e) the upper secondary threshold for secondary Class 1 contributions in relation to the Under 21 group (for the upper limit of the age-related secondary percentage) shall be £967 ; and

(f) the upper secondary threshold for secondary Class 1 contributions in relation to relevant apprentices (for the upper limit of zero-rate secondary Class 1 contributions) shall be £967

Section 11 Prescribed equivalents

(1) The prescribed equivalents of the lower and upper earnings limits , the primary and secondary thresholds and the upper secondary thresholds , for the purposes of—

(a) sections 6(1), 6A(1), 8(1), 9(1), 9A(9), and 9B(6) of the Act (which provide liability for Class 1 contributions, notional payment of primary Class 1 contribution where earnings are not less than the lower earnings limit, the calculation of primary Class 1 contributions , the calculation of secondary Class 1 contributions, the calculation of secondary Class 1 contributions in relation to the Under 21 age group and the calculation of secondary Class 1 contributions in relation to relevant apprentices respectively) ; and

(aa) section 22 of the Act (earnings factors); ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

shall be determined in accordance with paragraphs (2) to (5).

(1A) The prescribed equivalents of the upper accrual point for the purposes of—

(a) section 22 of the Act (earnings factors); and

(b) sections 41(1) (reduced rates of Class 1 contributions), 42A(1) (reduced rates of Class 1 contributions and rebates) and 45(1) (amount of minimum contributions) of the Pensions Act,

shall be determined in accordance with paragraphs (2), (4) and (5).

(2) Subject to paragraphs (4) and (5), the prescribed equivalents of the lower earnings limit ... shall be—

(a) where the earnings period is a multiple of a week, the amount calculated by multiplying the lower earnings limit ... by the corresponding multiple;

(b) where the earnings period is a month, the amount calculated by multiplying the lower earnings limit by 4 1/3;

(c) where the earnings period is a multiple of a month, the amount calculated by multiplying the lower earnings limit by 4 1/3 and multiplying the result by the corresponding multiple;

(d) in any other case, the amount calculated by dividing the lower earnings limit by 7 and multiplying the result by the number of days in the earnings period concerned.

(2A) Subject to paragraphs (4) and (5), the prescribed equivalents of the upper earnings limit shall be—

(a) where the earnings period is a month, £4,189 ;

(b) where the earnings period is a year, £50,270 ;

(c) where the earnings period is a multiple of a week, the amount calculated by dividing the figure in sub-paragraph (b) by 52 and multiplying the result by the corresponding multiple;

(d) where the earnings period is a multiple of a month, the amount calculated by dividing the figure in sub-paragraph (b) by 12 and multiplying the result by the corresponding multiple;

(e) in any other case, the amount calculated by dividing the figure in sub-paragraph (b) by 365 and multiplying the result by the number of days in the earnings period concerned.

(3) Subject to paragraphs (4) and (5), the prescribed equivalents of the primary threshold shall be—

(a) where the earnings period is a month, £1,048 ;

(b) where the earnings period is a year, £12,570 ;

(c) where the earnings period is a multiple of a week, the amount calculated by dividing the figure in sub-paragraph (b) by 52 and multiplying the result by the corresponding multiple;

(d) where the earnings period is a multiple of a month, the amount calculated by dividing the figure in sub-paragraph (b) by 12 and multiplying the result by the corresponding multiple;

(e) in any other case, the amount calculated by dividing the figure in sub-paragraph (b) by 365 and multiplying the result by the number of days in the earnings period concerned.

(3A) Subject to paragraphs (4) and (5), the prescribed equivalents of the secondary threshold shall be—

(a) where the earnings period is a month, £417 ;

(b) where the earnings period is a year, £5,000 ;

(c) where the earnings period is a multiple of a week, the amount calculated by dividing the figure in sub-paragraph (b) by 52 and multiplying the result by the corresponding multiple;

(d) where the earnings period is a multiple of a month, the amount calculated by dividing the figure in sub-paragraph (b) by 12 and multiplying the result by the corresponding multiple;

(e) in any other case, the amount calculated by dividing the figure in sub-paragraph (b) by 365 and multiplying the result by the number of days in the earnings period concerned.

(3B) Subject to paragraphs (4) and (5), the prescribed equivalents of the upper secondary threshold for secondary Class 1 contributions in relation to the Under 21 age group shall be—

(a) where the earnings period is a month, £4,189 ;

(b) where the earnings period is a year, £50,270 ;

(c) where the earnings period is a multiple of a week, the amount calculated by dividing the figure in sub-paragraph (b) by 52 and multiplying the result by the corresponding multiple;

(d) where the earnings period is a multiple of a month, the amount calculated by dividing the figure in sub-paragraph (b) by 12 and multiplying the result by the corresponding multiple;

(e) in any other case, the amount calculated by dividing the figure in sub-paragraph (b) by 365 and multiplying the result by the number of days in the earnings period concerned.

(3C) Subject to paragraphs (4) and (5), the prescribed equivalents of the upper secondary threshold for secondary Class 1 contributions in relation to relevant apprentices shall be—

(a) where the earnings period is a month, £4,189 ;

(b) where the earnings period is a year, £50,270 ;

(c) where the earnings period is a multiple of a week, the amount calculated by dividing the figure in sub-paragraph (b) by 52 and multiplying the result by the corresponding multiple;

(d) where the earnings period is a multiple of a month, the amount calculated by dividing the figure in sub-paragraph (b) by 12 and multiplying the result by the corresponding multiple;

(e) in any other case, the amount calculated by dividing the figure in sub-paragraph (b) by 365 and multiplying the result by the number of days in the earnings period concerned.

(4) The amounts determined in accordance with paragraphs (2)(b) and (c), paragraph (2A)(c) and (d) , paragraph (3)(c) and (d) , paragraph (3A)(c) and (d) , paragraph (3B)(c) and (d) and paragraph (3C)(c) and (d) if not whole pounds, shall be rounded up to the next whole pound.

(5) The amounts determined in accordance with paragraph (2)(d), paragraph (2A)(e) , paragraph (3)(e) , paragraph (3A)(e) , paragraph (3B)(e) and paragraph (3C)(e) shall be calculated to the nearest penny, and any amount of a halfpenny or less shall be disregarded.

(6) The following provisions of this regulation do not apply to Northern Ireland—

(a) paragraph (1A), and

(b) both references to “the upper accrual point” in paragraph (2), so that the term “the weekly limits” shall be read as referring only to the lower earnings limit in relation to Northern Ireland.

Section 12 Calculation of earnings-related contributions

(1) Subject to paragraphs (3) and (4), primary and secondary Class 1 contributions under section 6 of the Act (liability for Class 1 contributions) shall be calculated to the nearest penny and any amount of a halfpenny or less shall be disregarded.

(2) In the alternative, but subject to the provisions of paragraphs (3) to (5), the contributions specified in paragraph (1) may be calculated in accordance with the appropriate scale or, for contributions payable on earnings above the upper earnings limit or the prescribed equivalent of that limit, a contributions calculator prepared by the Board.

(3) Where the amount of earnings to which—

(a) the appropriate scale is to be applied does not appear in the scale, the amount of contributions payable shall be calculated by reference to the next smaller amount of earnings in the appropriate column in the scale;

(b) the appropriate contributions calculator is to be applied does not appear in the calculator, the amount of contributions payable shall be calculated—

(i) by obtaining from the calculator the amounts of contributions payable on the largest components of the earnings provided for in the calculator, and

(ii) by adding together the amounts so obtained.

(4) Where a scale or a contributions calculator would, but for the period to which it relates, be appropriate and the earnings period in question is a multiple of the period in the scale or, as the case may be, calculator, the scale or calculator shall be applied by dividing the earnings in question so as to obtain the equivalent earnings for the period to which the scale or calculator relates and—

(a) in the case of the scale, by multiplying the amount of contributions shown in the scale as appropriate to those equivalent earnings by the same factor as the earnings were divided;

(b) in the case of the calculator, by multiplying the amount of contributions shown in the calculator as appropriate to those equivalent earnings or, where no equivalent earnings are shown, the amount of contributions calculated in accordance with paragraph (3)(b), by the same factor as the earnings were divided.

(5) Unless the Board agree to the contrary, all the contributions payable in a year in respect of the earnings paid to or for the benefit of an earner in respect of his employed earner’s employment or, where he has more than one such employment and the earnings from those employments are aggregated under paragraph 1(1) of Schedule 1 to the Act (Class 1 contributions where more than one employment), in respect of those employments, shall be calculated either in accordance with paragraph (1) or paragraph (2) but not partly in accordance with one and partly in accordance with the other of those paragraphs, save that the contributions calculator may also be used where the contributions have been calculated in accordance with paragraph (1).

Section 13 General provisions as to aggregation

Where on one or more occasions the whole or any part of a person’s earnings in respect of employed earner’s employment is not paid weekly (whether or not it is treated for the purpose of earnings-related contributions as paid weekly), paragraph 1 of Schedule 1 to the Act (Class 1 contributions where more than one employment) shall have effect as if for the references to “week” there were substituted references to “ earnings period ” .

Section 14 Aggregation of earnings paid in respect of separate employed earner’s employments under the same employer

For the purpose of earnings-related contributions, where an earner is concurrently employed in more than one employed earner’s employment under the same employer, the earnings paid to or for the benefit of the earner in respect of those employments shall not be aggregated if such aggregation is not reasonably practicable because the earnings in the respective employment are separately calculated.

Section 15 Aggregation of earnings paid in respect of different employed earner’s employments by different persons and apportionment of contribution liability

(1) Subject to regulation 7, for the purposes of determining whether earnings-related contributions are payable in respect of earnings paid to or for the benefit of an earner in a given earnings period, and, if so, the amount of contributions, where in that period earnings in respect of different employed earner’s employments are paid to or for the benefit of the earner—

(a) by different secondary contributors who in respect of those employments carry on business in association with each other;

(b) by different employers, one of whom is, by virtue of Schedule 3 to the Social Security (Categorisation of Earners) Regulations 1978 , treated as the secondary contributor in respect of each of those employments; or

(c) by different persons, in respect of work performed for those persons by the earner in those employments and in respect of those earnings, some other person is, by virtue of that Schedule, treated as the secondary contributor,

the earnings paid in respect of each of the employments referred to in this paragraph shall, unless in a case falling under sub-paragraph (a) it is not reasonably practicable to do so, be aggregated and treated as a single payment of earnings in respect of one such employment.

(2) Where, under paragraph (1), earnings are aggregated, liability for the secondary contributions payable in respect of those earnings shall, in a case falling within paragraph (1)(a), be apportioned between the secondary contributors in such proportions as they shall agree amongst themselves, or, in default of agreement, in the proportions which the earnings paid by each bearer to the total amount of the aggregated earnings.

Section 16 Aggregation of earnings paid after pensionable age

Notwithstanding the provisions of regulation 15, a payment of earnings to which regulation 28 applies shall not be aggregated with any other earnings.

Section 17 Apportionment of single payment of earnings in respect of different employed earner’s employments by different secondary contributors

Where any single payment of earnings is made in respect of two or more employed earner’s employments under different secondary contributions, liability for earnings-related contributions shall be determined by apportioning the payment as follows—

(a) where the secondary contributors are, in respect of those employments, carrying on business in association with each other, to the secondary contributor who makes the payment;

(b) where the secondary contributors are not so carrying on business in association with each other, to each of those secondary contributors in the proportion which the earnings due in respect of that secondary contributor’s employment bears to the total of the single payment.

Section 18 Change of earnings period

(1) Paragraphs (2) and (3) apply where, by reason of a change in the regular interval at which any part of an earner’s earnings is paid or treated as paid in respect of employed earner’s employment (“the regular interval of payment”), that person’s earnings period in any employment or employments under the same secondary contributor is, or is in the process of being, changed.

(2) Subject to paragraph (3), in relation to any payments made on or after the date of change the earnings period shall be determined in accordance with the new interval.

(3) Where the new period is longer than the old period and during the first new period any payment has also been made at the old interval, the earnings-related contributions payable on any payment made on or after the date of change shall not exceed in amount the total which would have been payable if all the payments during the new period had been made at the new interval.

(4) In this regulation—

(a) the regular interval of payment which has been discontinued is referred to as “the old interval” and the interval which has, or is to, become the regular interval of payment is referred to as “the new interval”;

(b) the earnings period determined according to the old interval is referred to as “the old period” and that determined according to the new interval is referred to as “the new period”;

(c) reference to payment means payment of earnings actually made or, as the case may be, treated under regulation 7 as made, at an interval or date; and

(d) “date of change” means the date on which the first payment of earnings at the new interval is made.

Section 19 Holiday payments

Where as respects an employed earner’s employment in which the earner is paid or would, but for paragraph (b), be treated under regulation 7 as paid at a regular interval of a week or a fixed number of weeks, a payment of earnings includes or comprises a payment in respect of a period of holiday entitlement other than such a payment made to an earner in respect of a period of holiday entitlement outstanding on termination of that employment, for the purposes of calculating the earnings-related contributions payable in respect of that payment of earnings—

(a) the earnings period may be the length of the period in respect of which the payment is made, but where the length of that earnings period includes a fraction of a week that fraction shall be treated as a whole week; and

(b) where the earnings period is so determined, regulation 7 shall not apply.

Section 20 Joint employment of spouses or civil partners

For the purposes of earnings-related contributions, where spouses or civil partners are jointly employed in employed earner’s employment and earnings in respect of the employment are paid to them jointly, the amount of the earnings of each shall be calculated upon the same basis as that upon which those earnings are calculated for the purposes of income tax and, in the absence of such calculation, upon such basis as may be approved by the Board.

Section 21 Annual maxima for those with more than one employment

(1) For the purposes of section 19(1) and (2) of the Act (power to prescribe maximum amounts of contributions and repayments of excess) if an earner is employed in more than one employment his liability in any year—

(a) for primary Class 1 contributions; ...

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

shall not exceed an amount which equals the amount found in accordance with paragraph (2).

(2) The amount is found as follows.

Step One

Calculate—

Here UEL is the upper earnings limit, and PT the primary threshold, specified for the year.

Step Two

Multiply the result of Step One by 8% .

Step Three

Add together, in respect of all of the employed earner’s employments, so much of the earnings in each of those employments as exceeds the primary threshold and does not exceed the upper earnings limit.

Step Four

From the sum produced by Step Three subtract the amount found by the formula in Step One.

Step Five

If the result produced by Step Four is a positive value, multiply it by 2 per cent .

If that result is nil or a negative value, it is treated for the purposes of Step Eight as nil.

Step Six

Add together, in respect of all of the employed earner’s employments, so much of the earnings in each of those employments as exceeds the upper earnings limit.

Step Seven

Multiply the sum produced by Step Six by 2 per cent .

Step Eight

Add together the amounts produced by Steps Two, Five and Seven.

The result of Step Eight is the annual maximum, subject to the further qualifications in paragraphs (3) and (4).

(3) For the purpose only of determining the extent of the earner’s liability for contributions under paragraph (2), the amount of a primary Class 1 contribution which is paid at a rate less than the rate specified as the main primary percentage because the earner is a married woman who has made an election to pay contributions at the reduced rate as mentioned in regulation 127, shall be treated as equal to the amount of the primary Class 1 contribution which would be payable if the election had not been made.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) Notwithstanding paragraphs (1) to (4), an earner shall be liable, in the first instance, for the full amount of the contributions which would have been payable but for this regulation.

Section 22 Amounts to be treated as earnings

(1) For the purposes of section 3 of the Act (earnings) , the amounts specified in paragraphs (2) to (14) shall be treated as remuneration derived from an employed earner’s employment.

(2) The amount specified in this paragraph is the amount of any payment by a company to or for the benefit of any of its directors if—

(a) apart from this regulation the payment would, when made, not be earnings for the purposes of the Act; and

(b) the payment is made on account of or by way of an advance on a sum which would be earnings for those purposes.

(3) The amount specified in this paragraph is the amount equal to the cash equivalent in respect of car fuel which is treated as earnings from the employment of the earner for income tax purposes by virtue of section 149 of ITEPA 2003 .

(4) The amount specified in this paragraph is the amount which is treated as earnings from the employment of the employed earner by virtue of section 222(2) of ITEPA 2003 .

(5) The amount specified in this paragraph is the amount which counts as employment income of the employed earner under Chapter 2 of Part 7 of ITEPA 2003 computed in accordance with section 428 of ITEPA 2003 in respect of conditional shares or interests in conditional shares acquired before 16th April 2003.

References in this paragraph and paragraph (6) to ITEPA 2003 are to that Act as originally enacted.

(6) The amount specified in this paragraph is the amount which counts as employment income of the employed earner by virtue of Chapter 4 of Part 7 of ITEPA 2003 (shares: post-acquisition charges) in respect of shares or interests in shares acquired before 16th April 2003.

(7) The amounts specified in this paragraph are those—

(a) which count as employment income of the employed earner in relation to employment-related securities (within the meaning given by section 421B(8) of ITEPA 2003 ); and

(b) to which section 698 of ITEPA 2003 ( PAYE : special charges on employment-related securities) applies.

References in this paragraph and paragraphs (9) and (10) to ITEPA 2003 are to that Act as amended ... .

(8) The amount specified in this paragraph is the amount—

(a) which counts as employment income of the employed earner by virtue of sections 500 to 508 of ITEPA 2003 ; and

(b) in respect of which income tax is recoverable in accordance with PAYE regulations.

(9) The amount specified in this paragraph is any amount—

(a) which, by reason of the operation of Schedule 2 to the Finance ( No. 2) Act 2005, counts as employment income of the employed earner under any of Chapters 2 to 4 of Part 7 of ITEPA 2003 ; and

(b) where the relevant date for that income determined under section 698(6) of ITEPA 2003 (whether or not the PAYE Regulations apply to that income) is on or after 2nd December 2004 and before 20th July 2005.

(10) The amount specified in this paragraph is any amount—

(a) which by virtue of the operation of section 92 of the Finance Act 2006 counts as employment income of the employed earner under any of Chapters 2 to 4 of Part 7 of ITEPA 2003 ; and

(b) where the relevant date for that income determined under section 698(6) of ITEPA 2003 (whether or not the PAYE Regulations apply to that income) is on or after 2nd December 2004 and before 19th July 2006.

(11) The amount specified in this paragraph is the amount treated as earnings from the employment by virtue of section 226A of ITEPA 2003 (amount treated as earnings).

(12) The amount specified in this paragraph is any amount—

(a) paid or reimbursed to an employed earner in respect of expenses;

(b) provided pursuant to relevant salary sacrifice arrangements within the meaning of section 289A(5) of ITEPA 2003; and

(c) which is not a payment or reimbursement of relevant motoring expenditure within the meaning of paragraph (3) of regulation 22A.

(13) The amount specified in this paragraph is any amount paid or reimbursed to an employed earner in respect of expenses which is calculated according to a set rate rather than by reference to the actual amount incurred in respect of the expenses where such a rate is not—

(a) contained in regulations made by the Commissioners for Her Majesty’s Revenue and Customs under section 289A(6)(a); or

(b) approved under section 289B of ITEPA 2003.

(14) The amount specified in this paragraph is the amount of a termination award which is treated as earnings from the employment of the employed earner by virtue of section 402B of ITEPA 2003.

Section 22A Amounts to be treated as earnings in connection with the use of qualifying vehicles other than cycles

(1) To the extent that it would not otherwise be earnings, the amount specified in paragraph (2) shall be so treated.

(2) The amount is that produced by the formula—

Here—

RME is the aggregate of relevant motoring expenditure within the meaning of paragraph (3) in the earnings period; and

QA is the qualifying amount calculated in accordance with paragraph (4).

(2A) But the amount in paragraph (2) is taken to be RME (without the subtraction of QA) so far as the aggregate of relevant motoring expenditure is paid pursuant to optional remuneration arrangements.

(3) A payment is relevant motoring expenditure if—

(a) it is a mileage allowance payment within the meaning of section 229(2) of ITEPA 2003 ;

(b) it would be such a payment but for the fact that it is paid to another for the benefit of the employee; or

(c) it is any other form of payment, except a payment in kind, made by or on behalf of the employer, and made to, or for the benefit of, the employee in respect of the use by the employee of a qualifying vehicle.

Here “ qualifying vehicle ” means a vehicle to which section 235 of ITEPA 2003 applies, but does not include a cycle within the meaning of section 192(1) of the Road Traffic Act 1988.

(4) The qualifying amount is the product of the formula—

Here—

M is the sum of—

the number of miles of business travel undertaken, at or before the time when the payment is made—

in respect of which the payment is made, and

in respect of which no other payment has been made; and

the number of miles of business travel undertaken—

since the last payment of relevant motoring expenditure was made, or, if there has been no such payment, since the employment began, and

for which no payment has been, or is to be, made; and

R is the rate applicable to the vehicle in question, at the time when the payment is made, in accordance with section 230(2) of ITEPA 2003 and, if more than one rate is applicable to the class of vehicle in question, is the higher or highest of those rates.

Section 22B Amounts to be treated as earnings: Part 7A of ITEPA 2003

(1) For the purposes of section 3 of the Act (earnings), the amount specified in paragraph (2) shall be treated as remuneration derived from an employed earner’s employment.

(2) The amount is the amount which counts as employment income of the employed earner by virtue of Chapter 2 of Part 7A of ITEPA 2003 . This paragraph is subject to paragraphs (3) and (3A).

(3) Paragraph (2) does not apply if the relevant step which gives rise to the amount which counts as employment income by virtue of Chapter 2 of Part 7A of ITEPA 2003 would otherwise give rise to earnings for the purposes of the Act.

(3A) Paragraph (2) does not apply if—

(a) the amount would count as employment income by virtue of Part 7A ITEPA 2003 by reason of a relevant step within paragraph 1 or 1A of Schedule 11 (employment income provided through third parties: loans etc outstanding on 5 April 2019) to the Finance (No. 2) Act 2017, and

(b) the secondary contributor in relation to that amount would have been a person treated as a secondary contributor by virtue of regulation 5(1) of, and any of sub-paragraphs (a) to (f) of paragraph 9 of Column (B) of Schedule 3 (employments in respect of which persons are treated as secondary class 1 contributors) to, the Social Security (Categorisation of Earners) Regulations 1978.

(4) In paragraphs (3) and (3A) “relevant step” means a relevant step for the purposes of Part 7A of ITEPA 2003 .

Section 22C Amounts to be treated as earnings paid to or for the benefit of the earner: Schedule 11 to the Finance ( No. 2) Act 2017

(1) Where an amount is within regulation 22B(2) by reason of a relevant step within paragraph 1 or 1A of Schedule 11 (employment income provided through third parties: loans etc outstanding on 5 April 2019) to the Finance ( No. 2) Act 2017 it shall be treated for the purposes of Part 1 of the Act as being paid to or for the benefit of the employed earner in respect of the employed earner’s employment at such time as the relevant step which gives rise to it is treated as being taken under paragraph 1(2) or 1A(3) or (4) of that Schedule.

(2) In paragraph (1) “relevant step” means a relevant step for the purposes of Part 7A of ITEPA 2003.

Section 23 Manner of making sickness payments treated as remuneration

Where by virtue of section 4(1) of the Act (payments treated as remuneration and earnings) a sickness payment is treated as remuneration derived from an employed earner’s employment, that payment shall be made through the person who is the secondary contributor in relation to the employment concerned except where—

(a) the payment is payable by another person;

(b) that person has agreed with the secondary contributor to make the payment; and

(c) arrangements have been made between them for the person who has agreed to make the payment to furnish the secondary contributor with the information specified in paragraph 3(5)(a) of Schedule 4 (intermediate employers).

Section 24 Calculation of earnings for the purposes of earnings-related contributions

For the purpose of determining the amount of earnings-related contributions, the amount of a person’s earnings from employed earner’s employment shall be calculated on the basis of his gross earnings from the employment or employments in question.

Section 25 Payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions

Schedule 3 specifies payments which are to be disregarded in the calculation of earnings from employed earner’s employment for the purpose of earnings-related contributions.

Section 26 Certain payments by trustees to be disregarded

(1) For the purposes of earnings-related contributions, there shall be excluded from the calculation of a person’s earnings in respect of any employed earner’s employment any payment, or any part of a payment—

(a) which is made by trustees before 6th April 1990;

(b) the amount of which is or may be dependent upon the exercise by the trustees of a discretion or the performance by them of a duty arising under the trust;

(c) not being a sickness payment which by virtue of section 4(1) of the Act (payments treated as remuneration and earnings) is treated as remuneration derived from an employed earner’s employment,

and in respect of which either paragraph (2) or (3) is satisfied.

(2) This paragraph is satisfied if the trust, under which the payment is made, was created before 6th April 1985.

(3) This paragraph is satisfied if—

(a) the trust, under which the payment is made, was created on or after 6th April 1985;

(b) that trust took effect immediately on the termination of a trust created before 6th April 1985;

(c) the person to whom the payment is made either—

(i) was a beneficiary under the earlier trust, or

(ii) would have been such a beneficiary if, while the earlier trust was subsisting, he had held the employment in respect of which the payment is made; and

(d) there were or are payments under the earlier trust which in the case of payments made on or after 6th October 1987, are payments made in circumstances to which sub-paragraphs (a), (b) and (c) apply.

Section 27 Payments to directors which are to be disregarded

(1) For the purposes of earnings-related contributions, there shall be excluded from the calculation of a person’s earnings any payment in so far as it is a payment—

(a) by a company;

(b) to or for the benefit of a director of that company;

(c) in respect of any employed earner’s employment of that director with that company; and

(d) in respect of which paragraph (2), (3) or (4) is satisfied.

(2) This paragraph is satisfied if—

(a) the director is a partner in a firm carrying on a profession;

(b) being a director of a company is a normal incident of membership of that profession and of membership of the firm of the director;

(c) the director is required by the terms of his partnership to account to his firm for the payment; and

(d) the payment forms an insubstantial part of that firm’s gross returns.

(3) This paragraph is satisfied if—

(a) the director was appointed to that office by a company having the right to do so by virtue of its shareholding in, or an agreement with, the company making the payment;

(b) by virtue of an agreement with the company that appointed him, the director is required to account for the payment to that company; and

(c) the payment forms part of the profits brought into charge to corporation tax or income tax of the company that appointed the director.

(4) This paragraph is satisfied if—

(a) the director was appointed to that office by a company other than the company making the payment;

(b) by virtue of an agreement with the company that appointed him, the director is required to account for the payment to that company;

(c) the payment forms part of the profits brought into charge to corporation tax of the company that appointed the director; and

(d) the company that appointed the director is not one over which—

(i) the director has, or

(ii) any person connected with the director has, or

(iii) the director and any persons connected with him together have,

control.

(5) In this regulation—

(a) “company” has the meaning given by section 832(1) ... of the Taxes Act (interpretation of the Tax Acts) and Part 2 of Schedule 1 to ITEPA 2003 ;

(b) “the director” means the director to or for the benefit of whom the payment referred to in paragraph (1) is made; and

(c) in paragraph (4)(d)—

(i) “control” has the same meaning as in section 840 of the Taxes Act,

(ii) “any person connected with the director” means any of the following, namely the spouse, civil partner, parent, child, son-in-law or daughter-in-law of the director.

Section 28 Liability for Class 1 contributions in respect of earnings normally paid after pensionable age

Where in the year in which an earner attains pensionable age a payment of earnings is made to or for his benefit before the date he reaches pensionable age, and those earnings would normally fall to be paid in a year following that year, he shall be excepted from liability for primary Class 1 contributions payable in respect of those earnings.

Section 29 Liability for Class 1 contributions of persons over pensionable age

If—

(a) earnings are paid to or for the benefit of an earner after he attains pensionable age; and

(b) those earnings would normally fall to be paid before the date on which he reaches pensionable age,

section 6(3) of the Act (liability for Class 1 contributions) shall not operate to except him from liability for primary Class 1 contributions in respect of those earnings.

Section 30 Abnormal pay practices

(1) If an officer of the Board is satisfied that—

(a) a secondary contributor has followed or is following a practice in the payment of earnings which is abnormal for the employment in question (“an abnormal pay practice”); and

(b) by reason of that practice the liability for earnings-related contributions is or has been avoided or reduced,

paragraph (2) applies.

(2) If this paragraph applies the officer may, and if requested to do so by the earner or the secondary contributor shall, decide any question relating to a person’s earnings-related contributions as if the secondary contributor had not followed an abnormal pay practice, but had followed a practice normal for the employment in question.

(3) A decision under this regulation shall not apply to contributions based on payments made more than one year before the beginning of the year in which that decision is given.

Section 31 Practices avoiding or reducing liability for contributions

(1) If an officer of the Board is satisfied that—

(a) a practice exists as to the making of irregular or unequal payments of earnings; and

(b) by reason of the practice the liability for earnings-related contributions is avoided or reduced,

he may, and if requested to do so by either the earner or the secondary contributor shall, decide whether to issue a direction to secure that the same contributions are payable as would be payable if the practice were not followed.

(2) A direction under paragraph (1)—

(a) shall specify the date from which it is to have effect, which shall not be earlier than that on which it is given;

(b) shall have effect until—

(i) the direction is superseded by the giving of a further direction, or

(ii) an officer of the Board is satisfied that the practice has ceased, or has ceased to have the effect mentioned in paragraph (1)(b); and

(c) shall be given to the earner and the secondary contributor concerned.

This is subject to the qualification in paragraph (3).

(3) A direction under paragraph (1) need not be given to an earner if the officer of the Board is for any reason unable to ascertain his identity or whereabouts.

(4) This regulation does not limit the operation of regulation 30.

Section 32 Interpretation for the purposes of this Part

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 33 Exception from liability to pay Class 1A contributions in respect of cars made available to members of an employed earner’s family or household in certain circumstances

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 34 Class 1A contributions payable where two or more cars are made available concurrently

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 35 Reduction of certain Class 1A contributions in the case of a car provided or made available by reason of two or more employments or to two or more employed earners

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 36 Reduction of certain Class 1A contributions on account of the number of employments in the cases of something provided or made available by reason of two or more employments and of something provided or made available to two or more employed earners

(1) This regulation applies if something is provided or made available—

(a) an employed earner by reason of two or more employed earner’s employments, whether under the same employer or different employers; or

(b) two or more employed earners concurrently by reason of their respective employed earner’s employments under the same employer,

and all of those employed earner’s employments are employments other than excluded employments within the meaning of the benefits code (see Chapter 2 of Part 3 of ITEPA 2003) .

(2) If this regulation applies the amount of any Class 1A contribution payable for the year by the person liable to pay such contribution shall be reduced ... by deducting from that amount an amount equal to the fraction—

of the amount which would be payable but for this regulation.

Here X is the total number of employments in respect of which the thing is provided or made available.

Section 37 Reduction of certain Class 1A contributions in respect of cars made available to disabled employed earners

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 38 Exception from liability to pay Class 1 contributions in respect of cars made available to disabled employed earners only for business and home to work travel

(1) If the conditions mentioned in paragraphs (2) to (5) are satisfied, the person who would otherwise be liable to pay the Class 1A contribution for that year in respect of the employer earner and the car mentioned in those paragraphs shall be excepted from that liability.

(2) The first condition is that the car is made available to an earner who is disabled.

(3) The second condition is that the car is made available to the earner by reason of his employment.

(4) The third condition is that the car is made available account of the earner’s disability for the purposes of, or for purposes which include assisting, the earner’s travelling between the earner’s home and place of employment.

(5) The fourth condition is that the terms on which the car is made available to the earner prohibit private use other than—

(a) by the earner to whom it is made available; and

(b) in travelling between the earner’s home and place of employment.

(6) The fifth condition is that no prohibited private use of the car has been made in the year.

Section 39 Calculation of Class 1A contributions

Where a person is liable to pay a Class 1A contribution in accordance with section 10 of the Act (Class 1A contributions: benefits in kind, etc) the amount of that contribution shall be calculated to the nearest penny, and any amount of a halfpenny or less shall be disregarded.

Section 40 Prescribed general earnings in respect of which Class 1A contributions not payable

(1) Class 1A contributions shall not be payable in respect of the general earnings prescribed by paragraphs (2) to (7).

(2) The general earnings prescribed by this paragraph are those which are excluded from the calculation of a person’s earnings in respect of any employed earner’s employment by virtue of the following provisions of Schedule 3—

(za) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(a) in Part VI, paragraphs 2(b), 3 to 5, 7, 10 and 11;

(ab) in Part 7, paragraph 12;

(b) in Part VIII, paragraphs 4 to 5 and 13;

(c) in Part IX, paragraphs 3 to 7A ; and

(d) in Part X, paragraphs 5, 9, 11 to 13 and 15 .

(3) The general earnings prescribed by this paragraph are those which are payments which are not excluded from the calculation of a person’s earnings in respect of any employed earner’s employment by virtue of paragraph 1 of Part II of Schedule 3 (payments in kind), but which are so excluded by virtue of paragraph 3 of Part VIII of Schedule 3 (qualifying travelling expenses) or paragraph 9 of that Part (specific and distinct expenses).

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) The general earnings prescribed by this paragraph are so much of any general earnings as are not charged to income tax as employment income by virtue of; any of the following extra-statutory concessions published by the Board as at 1st September 2000—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) A11 (residence in the United Kingdom: year of commencement or cessation of residence);

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e) A37 (tax treatment of directors’ fees received by partnerships and other companies);

(f) A56 (benefits in kind: tax treatment of accommodation in Scotland provided for employees);

(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(l) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(m) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(o) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(p) A91 (living accommodation provided by reason of employment);

(q) A97 (Jobmatch programme).

Sub-paragraphs (b) and (q) do not apply to Northern Ireland and sub-paragraph (f) applies only to Scotland.

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 40A Exception from liability to pay Class 1A contributions in respect of an amount representing an amount on which Class 1 or Class 1A contributions have already been paid pursuant to the Social Security Contributions (Limited Liability Partnership) Regulations 2014

Class 1A contributions shall not be payable in respect of a benefit in kind provided by an employer to an employed earner which represents an amount on which Class 1 or Class 1A contributions are payable by a limited liability partnership in respect of that earner by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014.

Section 40B Exception from liability to pay Class 1A contributions ... in respect of sporting testimonial payments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 40C Special provisions for reporting, payment and collection of Class 1A contributions relating to termination awards

(1) This regulation applies to a person (“LP”) who is liable to pay Class 1A contributions in respect of a termination award in accordance with section 10(1A) and (3A) of the Act.

(2) LP must—

(a) on or before making the termination award, deliver to HMRC the information specified in Schedule 4A (real time returns), and

(b) pay the Class 1A contributions to HMRC within the applicable time limit specified in either paragraph 10 (monthly payment of contributions by employer) of Schedule 4 (provisions derived from income tax acts and pay as you earn regulations) or paragraph 11 (quarterly payments of contributions by employer) of that Schedule.

(3) Paragraphs 11ZA (payments and recoveries for each tax period by Real Time Information employers: returns), 15 (specified amount of earnings-related contributions payable by the employer), 21E (returns under paragraphs 21A and 21D: amendments), 21EA (failure to make a return under paragraph 21A and 21D), 21G (penalty: failure to comply with paragraph 21A or 21D) and 26 (retention by employer of contribution and election records) of Schedule 4 apply to LP with the following modifications—

(a) references to “earnings” are to be read as references to termination awards,

(b) references to “the employer” are to be read as references to LP, and

(c) references to “earnings related contributions” are to be read as references to any Class 1A contributions that LP is liable to pay in respect of the termination award.

(4) Paragraphs (2) and (3) do not apply where paragraph (6) applies.

(5) Paragraph (6) applies where—

(a) a termination award consists of the provision of a benefit which is an asset provided to a person (“P”) by or on behalf of P’s former employer, and

(b) the asset is made available to P without any transfer of ownership of that asset.

(6) Where this paragraph applies—

(a) LP must report and pay to HMRC any Class 1A contributions due in respect of the benefit referred to in paragraph (5) for a tax year in accordance with regulations 70 (payment of Class 1A contributions) and 71 (due date for payment of a Class 1A contribution), and

(b) regulation 55 (repayment of Class 1A contributions) and regulations 74 (employer failing to pay a Class 1A contribution) to 83A (requirement to give security or further security for amounts of Class 1A contributions) apply with regard to the reporting, repayment and payment of interest on such payments.

(7) Where a termination award consists of a cash benefit and one or more other benefits, the Class 1A liability is calculated by applying the threshold provided for in section 403(1) and (4) of ITEPA 2003 against those benefits in the following order—

(a) the cash benefit,

(b) any benefit which consists of an asset where ownership has been transferred to P,

(c) any other benefit which consists of an asset that has been made available to P without any transfer of ownership.

(8) Regulations 72 (Class 1A contribution due on succession to business) and 73 (Class 1A contribution due on cessation of business) apply to LP as if LP was the employer referred to in paragraph (1)(a) of each of those regulations.

Section 40D Special provisions for reporting, payment and collection of Class 1A contributions relating to sporting testimonials

(1) This regulation applies to a controller of a sporting testimonial (“C”) who is liable to pay Class 1A contributions in respect of a sporting testimonial payment in accordance with section 10ZBA of the Act.

(2) C must—

(a) on or before making a sporting testimonial payment, deliver to HMRC the information specified in Schedule 4A (real time returns), and

(b) pay the Class 1A contributions to HMRC within the time limit specified in paragraph 10 (monthly payment of contributions by employer) of Schedule 4 (provisions derived from income tax acts and pay as you earn regulations).

(3) Paragraphs 11ZA (payments and recoveries for each tax period by Real Time Information employers: returns), 15 (specified amount of earnings-related contributions payable by the employer), 21E (returns under paragraphs 21A and 21D: amendments), 21EA (returns under paragraphs 21A and 21D), 21G (penalty: failure to comply with paragraph 21A or 21D) and 26 (retention by employer of contribution and election records) of Schedule 4 apply to C with the following modifications—

(a) references to “earnings” are to be read as references to sporting testimonial payments,

(b) references to “the employer” are to be read as references to C, and

(c) references to “earnings related contributions” are to be read as references to any Class 1A contributions that C is liable to pay in respect of sporting testimonial payments.

(4) Paragraphs (2) and (3) do not apply where paragraph (6) applies.

(5) Paragraph (6) applies where—

(a) a sporting testimonial payment is made in a tax year other than the tax year in which the sporting testimonial took place,

(b) in the tax year in which the sporting testimonial payment is made, C is no longer making payments and deductions under the PAYE Regulations, or

(c) a sporting testimonial payment consists of a benefit which is the provision of an asset by or on behalf of C, without transfer of ownership of that asset.

(6) Where this paragraph applies C must report and pay to HMRC any Class 1A contributions due in respect of the sporting testimonial payment referred to in paragraph (5) in accordance with regulations 70 (payment of Class 1A contributions), 71 (due date for payment of a Class 1A contribution) and 74 (employer failing to pay a Class 1A contribution) to 83A (requirement to give security or further security for amounts of Class 1A contributions).

(7) Regulations 55 (repayment of Class 1A contributions) and 77 (payment of interest on a repaid Class 1A contribution) apply to any repayments of Class 1A contributions under this regulation unless the overpayment has been recovered by C under paragraph 11ZA(3) of Schedule 4.

(8) Where a sporting testimonial payment consists of a cash benefit and one or more other benefits, the Class 1A liability is calculated by applying the threshold provided for in section 306B(5) and (6) of ITEPA 2003 against those benefits in the following order—

(a) the cash benefit,

(b) any benefit which consists of an asset where ownership has been transferred by or on behalf of C,

(c) any other benefit which consists of an asset that has been made available for use without any transfer of ownership by or on behalf of C.

Section 41 Calculation of Class 1B contributions

Where a person is liable to pay a Class 1B contribution in accordance with section 10A of the Act (Class 1B contributions) , the amount of that contribution shall be calculated to the nearest penny, and any amount of a half penny or less shall be disregarded.

Section 42 Exception from liability to pay Class 1B contributions

(1) A person shall be excepted from liability to pay a Class 1B contribution for any year in respect of—

(a) the amount of any general earnings which are chargeable emoluments under section 10A(4) of the Act of an employee included in a PAYE settlement agreement; and

(b) the total amount of income tax in respect of which that person is accountable to the Board in relation to general earnings of such an employee in accordance with a PAYE settlement agreement,

where the employee is a person falling within paragraph (2) or (3).

(2) The employee falls within this paragraph if he is subject to the legislation of a contracting party, other than the United Kingdom, to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as adjusted by the Protocol signed at Brussels on 17th March 1993 .

(3) The employee falls within this paragraph if he is subject to the legislation of a country outside the United Kingdom in respect of which there is an Order in Council under section 179 of the Administration Act (reciprocal agreements with countries outside the United Kingdom) giving effect to a reciprocal agreement.

(4) If a person is excepted from liability to pay a Class 1B contribution for any year under paragraphs (1) to (3), he shall be entitled, if he so wishes, to pay that contribution for that year.

Section 43 Exception from ... Class 2 contributions

(1) Subject to paragraphs (2) and (3), a self-employed earner shall not be treated under section 11(5B) of the Act as having actually paid a Class 2 contribution for any contribution week—

(a) in respect of the whole of which the earner is in receipt of incapacity benefit;

(ab) in respect of the whole of which the earner is in receipt of employment and support allowance;

(b) throughout the whole of which the earner is incapable of work;

(c) in respect of which the earner is in receipt of maternity allowance;

(d) throughout the whole of which he is undergoing imprisonment or detention in legal custody; or

(e) in respect of any part of which the earner is in receipt of carer’s allowance , carer support payment under the Carer’s Assistance (Carer Support Payment) (Scotland) Regulations 2023 or an unemployability supplement.

(2) For the purposes of paragraph (1), in computing the period of a contribution week—

(a) subject to sub-paragraph (b), Sunday shall be disregarded;

(b) in the case of a self-employed earner who objects on religious grounds to working on a specific day in each contribution week other than Sunday, and does not object to working on Sunday, that specific day shall be disregarded instead of Sunday.

(3) If a self-employed earner is not treated as having actually paid a Class 2 contribution for any contribution week by virtue of paragraph (1), he shall be entitled, subject to Part 6, to pay a contribution for that week if he so wishes.