The Social Security (Contributions) (Amendment No. 2) Regulations 2002

• Citation: S.I. 2002/307
• Sections: 7

Section 1 Citation, commencement and interpretation

(1) These Regulations may be cited as the Social Security (Contributions) (Amendment No. 2) Regulations 2002 and shall come into force on 6th April 2002.

(2) In these Regulations—

(a) “the principal Regulations ” means the Social Security (Contributions) Regulations 2001 ; and

(b) except where the context otherwise requires—

(i) a reference to a numbered regulation is a reference to the regulation of the principal Regulations bearing that number; and

(ii) a reference to a numbered Schedule is a reference to the Schedule to the principal Regulations bearing that number.

Section 2 Amendment of the principal Regulations

Amend the principal Regulations as follows.

Section 3 Amendment of the principal Regulations

In regulation 1(2) after the definition of “the Board” insert—

“business travel” has the meaning given in paragraph 2 of Schedule 12AA to the Taxes Act ;

Section 4 Amendment of the principal Regulations

(1) Amend regulation 22 (payments to be treated as earnings) as follows.

(2) In paragraph (1) for “(2) to (4)” substitute “(2) to (5)”.

(3) After paragraph (4) insert—

(5) The amount specified in his paragraph is the amount equal to the cash equivalent, in respect of car fuel, which is chargeable to tax under Schedule E by virtue of section 158 of the Taxes Act .

Section 5 Amendment of the principal Regulations

After regulation 22 insert—

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

(22A)

(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).

(3) A payment is relevant motoring expenditure if—

(a) it is a mileage allowance payment within the meaning of section 197AD(2) of the Taxes Act ;

(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” has the same meaning as in Schedule 12AA to the Taxes Act, 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 paragraph 4(2) of Schedule 12AA to the Taxes Act and, if more than one rate is applicable to the class of vehicle in question, is the higher or highest of those rates.

Section 6 Amendment of the principal Regulations

In Part V of Schedule 3 (payments to be disregarded in the calculation of earnings for the purpose of earnings-related contributions: non-cash vouchers to be disregarded as payments in kind) for paragraph 1(2) substitute—

(2) A non-cash voucher may also be disregarded—

(a) by virtue of paragraph 7D of Part VIII (car fuel); or

(b) in the circumstances specified in paragraph 4 of Part X (payments by way of incidental expenses).

Section 7 Amendment of the principal Regulations

(1) Amend Part VIII of Schedule 3 (payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions: travelling, relocation and other expenses and allowances of the employment) as follows.

(2) After paragraph 7 insert—

Qualifying amounts of relevant motoring expenditure

(7A) To the extent that it would otherwise be earnings, the qualifying amount calculated in accordance with regulation 22A(4).

Qualifying amounts of mileage allowance payment in respect of cycles

(7B)

(1) To the extent that it would otherwise be earnings, the qualifying amount of a mileage allowance payment in respect of a cycle.

(2) The qualifying amount is that which would be produced by the formula in regulation 22A(4) if the value for R were the rate for the time being approved under paragraph 4(2) of Schedule 12AA to the Taxes Act in respect of a cycle.

(3) In this paragraph—

“cycle” has the meaning given in section 192(1) of the Road Traffic Act 1988; and

“mileage allowance payment” has the meaning given in section 197AD(2) of the Taxes Act.

Qualifying amounts of passenger payment

(7C)

(1) To the extent that it would otherwise be earnings, the qualifying amount of a passenger payment.

(2) The qualifying amount is that which would be produced by the formula in regulation 22A(4) if—

(a) references to business travel were to business travel for which the employee carries a qualifying passenger; and

(b) the value for R were the rate for the time being approved for a passenger payment under paragraph 5 of Schedule 12AA to the Taxes Act.

(3) In this paragraph—

“passenger payment” has the meaning given in section 197AE(2) of the Taxes Act ; and

“qualifying passenger” has the same meaning as it has in paragraph 5(3) of Schedule 12AA to the Taxes Act.

Car fuel

(7D)

(1) A payment by way of the provision of car fuel in circumstances where an amount is chargeable to income tax under Schedule E, in respect of its provision, under section 158 of the Taxes Act.

(2) Subsection (3) of section 158 of the Taxes Act applies for the construction of the reference to car fuel in sub-paragraph (1) as it applies for the construction of that section.

(3) Amend paragraph 9 (specific and distinct expenses) as follows—

(a) renumber the existing paragraph 9 as sub-paragraph (1) of that paragraph;

(b) at the end of sub-paragraph (1) add—

This is subject to the following qualification.

(c) after sub-paragraph (1) add—

(2) Sub-paragraph (1) does not authorise the disregard of any amount by way of relevant motoring expenditure, within the meaning of paragraph (3) of regulation 22A, in excess of that permitted by the formula in paragraph (4) of that regulation.