The Social Security (Northern Ireland) Order 1998

Collection of contributions by the Department

54.  After paragraph 7A of Schedule 1 to the Contributions and Benefits Act there shall be inserted the following paragraph—

“Collection of contributions by the Department

7B.— (1) Regulations may provide that, in such cases or circumstances as may be prescribed—

(a) contributions payable under Part I of this Act shall be paid to the Department (and not to the Inland Revenue); and

(b) the Department shall be responsible for the collection of such contributions, and generally for the relevant administration.

(2) Regulations under this paragraph may, in particular—

(a) provide for returns to be made to the Department by such date as may be prescribed;

(b) prescribe the form in which returns are to be made, or provide for returns to be made in such form as the Department may approve;

(c) prescribe the manner in which contributions are to be paid, or provide for contributions to be paid in such manner as the Department may approve;

(d) prescribe the due date for the payment of contributions;

(e) subject to sub-paragraph (4) below, provide for interest to be charged by the Department on contributions that are not paid by the due date, and for enabling such interest to be remitted or repaid;

(f) provide for interest to be paid on contributions that fall to be repaid;

(g) provide for determining the date from which interest to be charged or paid pursuant to regulations under paragraph (e) or (f) above is to be calculated;

(h) provide for penalties to be imposed in respect of a person who—

(i) fails to submit, within the time allowed, a return required to be made in accordance with regulations under paragraph (a) above;

(ii) in making such a return, fraudulently or negligently fails to provide any information or computation that he is required to provide;

(iii) in making such a return, fraudulently or negligently provides any incorrect information or computation; or

(iv) fails to pay Class 2 contributions by the due date;

(i) provide for a penalty imposed pursuant to regulations under paragraph (h) above to carry interest from the date on which it becomes payable until payment.

(3) Where—

(a) a decision relating to contributions falls to be made under Article 9, 10, 11, 13 or 15 of the Social Security (Northern Ireland) Order 1998 or section 22 of the Administration Act; and

(b) the decision will affect a person’s liability for, or the amount of, any interest due in respect of those contributions,

regulations under sub-paragraph (2)(e) above shall not require any such interest to be paid until the decision has been made.

(4) Regulations under sub-paragraph (2)(e) above may provide that, in such cases or circumstances as may be prescribed, interest under those regulations may be charged by the Inland Revenue (instead of the Department) as if the regulations were made by virtue of paragraph 6 above.

(5) Regulations under sub-paragraph (2)(h) above shall—

(a) prescribe the rates of penalty, or provide for how they are to be ascertained;

(b) subject to sub-paragraph (6) below, provide for the penalty to be imposed by the Department—

(i) within 6 years after the date on which the penalty is incurred; or

(ii) where the amount of the penalty is to be ascertained by reference to the amount of any contributions payable, at any later time within 3 years after the final determination of the amount of those contributions;

(c) provide for determining the date on which, for the purposes of paragraph (b) above, the penalty is incurred;

(d) prescribe the means by which the penalty is to be enforced; and

(e) provide for enabling the Department, in its discretion, to mitigate or to remit the penalty, or to stay or to compound any proceedings for it.

(6) Regulations under sub-paragraph (2)(h)(ii) or (iii) above may provide that, in such cases or circumstances as may be prescribed, penalties under those regulations may be imposed by the Inland Revenue (instead of the Department) as if the return in question were a contributions return within the meaning of paragraph 7 above.

(7) Section 12 above shall not apply in relation to Class 2 contributions in respect of which the Department charges interest or imposes a penalty pursuant to regulations under paragraph (e) or (h) of sub-paragraph (2) above.

(8) Interest or penalties may be charged by virtue of regulations under this paragraph in respect of a period before the coming into operation of Article 54 of the Social Security (Northern Ireland) Order 1998 but only to the extent that interest or penalties would have been chargeable if the contributions in question had been recoverable, in respect of that period, by virtue of regulations under paragraph 6 above.

(9) Any reference to contributions in sub-paragraph (1) above shall be construed as including a reference to any interest or penalty payable, in respect of contributions, by virtue of regulations under paragraph (e) or (h) of sub-paragraph (2) above.

(10) The rate of interest applicable for any purpose of this paragraph shall be—

(a) the rate from time to time prescribed under section 178 of the Finance Act 1989 for the purpose of any enactment (whether or not extending to Northern Ireland) if prescribed by regulations made by virtue of this paragraph; or

(b) such other rate as may be prescribed by such regulations.”.