The Social Security (Contributions) (Amendment) Regulations 2004

Amendment of the Social Security (Contributions) Regulations 2001

2.—(1) Paragraph 5 of Part 10 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (gratuities and offerings to be disregarded in the computation of earnings) (1) shall be amended as follows.

(2) In sub-paragraph (1) for the words from “which satisfies either” to the end of the sub-paragraph substitute—

• “which—

  (a)

  satisfies the condition in either sub-paragraph (2) or (3); and

  (b)

  is not within sub-paragraph (4) or (5).”.

(3) In sub-paragraph (2) for “The first condition” substitute “The condition in this sub-paragraph”.

(4) In sub-paragraph (3) for “The alternative condition” substitute “The condition in this sub-paragraph”.

(5) At the end of the paragraph add—

“(4) A payment made to the earner by a person who is connected with the secondary contributor is within this sub-paragraph unless—

(a) it is—

(i) made in recognition for personal services rendered to the connected person by the earner or by another earner employed by the same secondary contributor; and

(ii) similar in amount to that which might reasonably be expected to be paid by a person who is not so connected; or

(b) the person making the payment does so in his capacity as a tronc-master.

(5) A payment made to the earner is within this sub-paragraph if it is made by a trustee holding property for any persons who include, or any class of persons which includes, the earner.

In this sub-paragraph “trustee” does not include a tronc-master.

(6) A person is connected with the secondary contributor for the purposes of this paragraph if his relationship with the secondary contributor, or where the employer and secondary contributor are different, with either of them, is as described in subsection (2), (3), (4), (5), (6) or (7) of section 839 of the Taxes Act (connected persons)(2).”.

(1)

S.I. 2001/1004. A relevant amendment is made to Schedule 4 to those Regulations (application of provisions of the Income Tax (Employments) Regulations 1993 for the purposes of contributions) by regulation 6 of S.I. 2002/2929.

(2)

Section 839 has been amended. The relevant amendment is the substitution of subsection (3) by paragraph 20 of Schedule 17 to the Finance Act 1995(c. 4).