The Social Security (Contributions) (Amendment No. 3) Regulations 2024

Amendment of the Social Security (Contributions) Regulations 2001

2.—(1) The Social Security (Contributions) Regulations 2001(1) are amended as follows.

(2) In regulation 1(2) (citation, commencement and interpretation)—

(a) after the definition of “the Administration Act”, insert—

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

(a)

is not made at a regular interval(2),

(b)

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

(c)

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;”,

(b) after the definition of “company”, insert—

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

(c) after the definition of “readily convertible asset”, insert—

““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;”.

(3) In regulation 7 (treatment of earnings paid otherwise than at regular intervals)—

(a) in regulation (3) at the beginning insert, “Subject to paragraph (3A)”, and

(b) after paragraph (3) insert—

“(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) In Schedule 4 (provisions derived from the Income Tax Acts and the Income Tax (Pay As You Earn) Regulations 2003), after paragraph 21AD(3) (benefits and expenses – returns under regulations 85 to 87 of the PAYE Regulations) insert—

“Employees paid advance payments of earnings

21AE.— (1) Sub-paragraph (2) applies where an employer—

(a) normally makes a payment of earnings to an employee at regular intervals of no shorter than a week and no longer than a month,

(b) makes an advance payment(4) to the employee, and

(c) makes a reduced regular interval payment to the employee.

(2) Where this paragraph applies—

(a) the requirements of paragraphs 6(1)(a)(5) (deduction of earnings-related contributions), 7(13)(6) (calculation of deduction), 21A (real time returns of information about payments of earnings) and Schedule 4A(7) (real time returns) do not apply to advance payments in the period beginning with the making of the advance payment and ending with the making of the reduced regular interval payment, and

(b) the reduced regular interval payment and advance payments made in respect of it must be treated for the purposes of paragraphs 6(1)(a), 7(13), 21A and Schedule 4A as if they were a single payment of earnings made at the time the reduced regular interval payment is made.

(3) In this paragraph “regular interval” has the meaning given in regulation 1(2) of these Regulations.”.

(1)

S.I. 2001/1004; relevant amending instruments are S.I. 2012/821 and S.I. 2015/478.

(2)

“Regular interval” is defined in regulation 1(2) of S.I. 2001/1004.

(3)

Paragraph 21AD was inserted by S.I. 2013/622.

(4)

“Advance payment” is defined in regulation 1(2) of S.I. 2001/1004.

(5)

Paragraph 6(1) relevant amending instruments are S.I. 2004/770, S.I. 2013/622 and S.I. 2015/478.

(6)

Paragraph 7(13) relevant amending instruments are S.I. 2004/770 and S.I. 2015/478.

(7)

Paragraph 21A and Schedule 4A were inserted by S.I. 2012/821; there are other amending instruments but none is relevant.