The Social Security (Contributions) (Amendment No. 5) Regulations 2011

• Citation: S.I. 2011/2700
• Sections: 7

Section 1 Citation, commencement and application

(1) These Regulations may be cited as the Social Security (Contributions) (Amendment No. 5) Regulations 2011 and shall come into force on 6th December 2011.

(2) Regulation 3 does not apply in relation to an amount which counts as employment income by virtue of Chapter 2 of Part 7A of the Income Tax (Earnings and Pensions) Act 2003 if that Chapter applies because of paragraph 53 or paragraph 54 of Schedule 2 to the Finance Act 2011 .

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

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

Section 3 Amounts to be treated as earnings

After regulation 22A insert the following—

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

(22B)

(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 .

(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.

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

Section 4 Payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions

In Part 5 of Schedule 3 (certain non-cash vouchers to be disregarded as payments in kind), in paragraph 7—

(a) for sub-paragraph (1) substitute—

(1) A qualifying childcare voucher, where an employee joined a scheme—

(a) before 6th April 2011;

(b) before 6th April 2011 but ceased to be employed by the employer and was subsequently re-employed by the employer and re-joined the scheme before 6th April 2011; or

(c) before 6th April 2011 and there was a continuous period of 52 weeks ending before 6th April 2011 throughout which vouchers were not being provided for the employee under the scheme,

subject to the qualifications in sub-paragraphs (2) and (5).

(b) omit sub-paragraph (1A).

Section 5 Payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions

In Part 5 of Schedule 3, in paragraph 7A—

(a) for sub-paragraph (1) and the heading substitute—

Qualifying childcare vouchers for employees who joined a scheme on or after 6th April 2011, or before 6th April 2011 where there has been a break in employment or a 52 week break in receiving vouchers recommencing on or after 6th April 2011

(7A)

(1) A qualifying childcare voucher, where an employee joined a scheme—

(a) on or after 6th April 2011;

(b) before 6th April 2011 but ceased to be employed by the employer and was subsequently re-employed by the employer and re-joined the scheme on or after 6th April 2011; or

(c) before 6th April 2011 and there was a continuous period of 52 weeks ending on or after 6th April 2011 throughout which vouchers were not being provided for the employee under the scheme,

subject to the qualifications in sub-paragraphs (3) and (6).

(b) in sub-paragraph (15)—

(i) in paragraph (a) omit “and”, and

(ii) for paragraph (b) substitute—

(b) guaranteed contractual bonuses;

(c) contractual commission;

(d) guaranteed overtime payments;

(e) location or cost of living allowances;

(f) shift allowances;

(g) skills allowances;

(h) retention and recruitment allowances; and

(i) market rate supplements.

(c) in sub-paragraph (16)—

(i) before paragraph (a) insert—

(za) contributions under a pension scheme if the employee has authorised the employer to make the deductions from relevant payments (as defined by regulation 4 of the PAYE Regulations ) for which relief at source is given under section 192(1) of the Finance Act 2004 (relief at source);

(ii) in paragraph (a) omit “registered” and after “tax year” add “in accordance with the PAYE Regulations” ;

(iii) in paragraph (b) after “tax year” add “in accordance with the PAYE Regulations”;

(iv) in paragraph (c) after “with” insert “the”; and

(v) for paragraph (e) substitute—

(e) amounts equivalent to the amount of the personal allowance under section 35(1) of the Income Tax Act 2007 , and in addition if applicable, the amount of the blind person’s allowance under section 38 of that Act.

Section 6 Payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions

In Part 6 of Schedule 3 (payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions: pensions and pension contributions)—

(a) in the heading which appears before paragraph 7, after “to” insert “and benefits from”;

(b) in paragraph 7(1) after “by virtue of” insert “any of the following provisions, and any benefit referable to that payment”; and

(c) in paragraph 10—

(i) in sub-paragraph (4)(a), for “section 164(a)” substitute “section 164(1)(a)”;

(ii) in sub-paragraph (4)(b), for “section 164(b)” substitute “section 164(1)(b)”;

(iii) in sub-paragraph (4)(c), for “section 164(e)” substitute “section 164(1)(e)”;

(iv) in sub-paragraph (4)(d), for “section 164(f)” substitute “section 164(1)(f)”;

(v) omit sub-paragraph (5)(a)(iii); and

(vi) in sub-paragraph (6)(d), for “sub-paragraph (2)” substitute “sub-paragraphs (2) and (3)”.

Section 7 Payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions

In Part 10 of Schedule 3 (payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions: miscellaneous and supplemental) insert the following after paragraph 2—

Payments connected to amounts within regulation 22B

(2A)

(1) A payment (“A”) the subject of which represents, or arises or derives (whether wholly or partly or directly or indirectly) from, an amount (“B”) treated as remuneration under regulation 22B which has previously been included in an employed earner’s earnings for the purposes of assessing earnings-related contributions.

(2) Paragraph (1) does not apply to the extent that A exceeds B.

(3) For the purposes of determining whether paragraph (1) applies, A is to be treated as including the value of any payment made before A which represents, or arises or derives (whether wholly or partly or directly or indirectly) from, B.