The Social Security (Contributions) (Amendment No. 5) Regulations 2004

• Citation: S.I. 2004/2246
• Sections: 2

Section 1 Citation and commencement

These Regulations may be cited as the Social Security (Contributions) (Amendment No. 5) Regulations 2004 and shall come into force on 22nd September 2004.

Section 2 Amendment of the Social Security (Contributions) Regulations 2001

(1) Paragraph 7 of Schedule 4 to the Social Security (Contributions) Regulations 2001 (recovery of Class 1 contributions: calculation of amount of deduction) shall be amended as follows.

(2) For sub-paragraph (9) substitute—

(9) Sub-paragraph (11) applies where—

(a) an employee receives non-monetary earnings comprising, or derived from, relevant securities; or

(b) during the post-cessation period a former employee receives non-monetary earnings—

(i) comprising, or derived from, relevant securities; and

(ii) in connection with the former employment.

Here “the post-cessation period” means the period beginning with the day on which the employment ceased and ending with the last day of the next tax year.

(3) For sub-paragraphs (11) and (12) substitute—

(11) Where this sub-paragraph applies, the employer or former employer may—

(a) retain such of the relevant securities as is necessary to enable him to recover the whole or any part of the primary Class 1 contributions in respect of those securities; and

(b) sell those securities.

This sub-paragraph is subject to sub-paragraphs (12) and (12A).

(11A) In sub-paragraphs (9), (11), (12) and (12A) “relevant securities” means securities in respect of which an amount is chargeable to income tax as employment income.

(12) The employer or former employer shall not retain or sell relevant securities without the prior written consent of the employee or former employee.

(12A) An employer or former employer who has retained relevant securities in accordance with sub-paragraph (11) shall account to the employee or former employee in respect of so much of the proceeds of sale as is not required to enable the employer or former employer to recover the primary Class 1 contributions in respect of those securities.