Modifications etc. (not altering text)
C1Pts. 1, 6 modified (6.4.2001) by S.I. 2001/1004, regs. 1(1), 113, 114(2) (with reg. 138)
Modifications etc. (not altering text)
C2Pt. 1 modified (2.4.1999) by The New Deal (25 plus) (Miscellaneous Provisions) Order 1999 (S.I. 1999/779), arts. 1(1), 2
C3Pt. 1 modified (6.4.2001) by The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004), regs. 1(1), 125 (as amended (6.4.2017) by S.I. 2017/416, regs. 1(2), 2; (6.4.2019) by S.I. 2019/555, regs. 1(2), 2)
C4Pt. 1 modified (13.9.2001) by The New Deal (Lone Parents) (Miscellaneous Provisions) Order 2001 (S.I. 2001/2915), arts. 1(1), 2
C5Pt. 1 modified (for the tax year 2022-23) by Health and Social Care Levy Act 2021 (c. 28), s. 5(2) (with s. 7(2)) (which Act was repealed (25.10.2022) by Health and Social Care Levy (Repeal) Act 2022 (c. 43), s. 1 (with savings and transitional modifications of Pt. 1 in s. 2, Sch. paras. 1-3, 5))
C6Pt. 1 modified (in relation to the tax year 2023-24) by National Insurance Contributions (Reduction in Rates) Act 2023 (c. 57), Sch. para. 1(1)-(3)
(1)Where—
[F3(a)for any tax year an earner is chargeable to income tax under ITEPA 2003 on an amount of general earnings received by him from any employment (“the relevant employment”),]
[F4(b)the relevant employment is both—
(i)employed earner’s employment, and
(ii)an employment, other than [F5lower-paid employment as a minister of religion], within the meaning of the benefits code (see Chapter 2 of Part 3 of ITEPA 2003),] and
(c)the whole or a part of the [F6general earnings] falls, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner,
a Class 1A contribution shall be payable for that tax year, in accordance with this section, in respect of that earner and so much of the [F7general earnings] as falls to be so left out of account.
[F8(1A)A Class 1A contribution is payable for a tax year, in accordance with this section, in respect of an earner and the amount of a termination award if and so far as—
(a)that amount counts as employment income of the earner under section 403 of ITEPA 2003 (charge on termination payments or benefits), and
(b)the earner is chargeable to income tax on that amount for the tax year by virtue of that section.
(1B)No Class 1A contribution is payable under subsection (1A) in respect of an amount so far as it is an amount of earnings in respect of which Class 1 contributions are payable.
(1C)No Class 1A contribution is payable under subsection (1A) unless the employment which is terminated is employed earner's employment.]
(2)Subject to [F9sections 10ZA and 10ZBA], a Class 1A contribution [F10payable under subsection (1)] for any tax year shall be payable by—
(a)the person who is liable to pay the secondary Class 1 contribution relating to the last (or only) relevant payment of earnings in that tax year in relation to which there is a liability to pay such a Class 1 contribution; or
(b)if paragraph (a) above does not apply, the person who, if the [F11general earnings] in respect of which the Class 1A contribution is payable were earnings in respect of which Class 1 contributions would be payable, would be liable to pay the secondary Class 1 contribution.
(3)In subsection (2) above “relevant payment of earnings” means a payment which for the purposes of Class 1 contributions is a payment of earnings made to or for the benefit of the earner in respect of the relevant employment.
[F12(3A)A Class 1A contribution payable under subsection (1A) is payable by the person who, if the amount in respect of which the Class 1A contribution is payable were earnings in respect of which Class 1 contributions would be payable, would be liable to pay the secondary Class 1 contribution.]
(4)The amount of the Class 1A contribution [F13payable under subsection (1)] in respect of any [F14general earnings] shall be the Class 1A percentage of so much of [F15them] as falls to be left out of account as mentioned in subsection (1)(c) above.
[F16(4A)The amount of the Class 1A contribution payable under subsection (1A) in respect of an amount is the Class 1A percentage of that amount.]
(5)In [F17subsections (4) and (4A)] above “the Class 1A percentage” means a percentage rate equal to the [F18secondary percentage] for the tax year in question.
(6)No Class 1A contribution shall be payable for any tax year in respect of so much of any [F19general earnings as are taken] for the purposes of the making of Class 1B contributions for that year to be included in a PAYE settlement agreement.
[F20(7)In calculating for the purposes of this section the amount of general earnings received by an earner from an employment, a deduction under any of the excluded provisions is to be disregarded.
This subsection does not apply in relation to a deduction if subsection (7A) applies in relation to it.
(7A)Where—
(a)a deduction in respect of a matter is allowed under an excluded provision, and
(b)the amount deductible is at least equal to the whole of any corresponding amount which would (but for this section) fall by reference to that matter to be included in the general earnings mentioned in subsection (7),
the whole of the corresponding amount shall be treated as not included.
(7B)For the purposes of subsections (7) and (7A) “excluded provision” means—
(a)any provision of Chapter 2 of Part 5 of ITEPA 2003 (deductions for employee’s expenses), other than section 352 (limited deduction for agency fees paid by entertainers), F21...
[F22(aa)any of sections 363 to 365 of ITEPA 2003 (certain deductions from benefits code earnings), or]
(b)any provision of Chapter 5 of Part 5 of ITEPA 2003 (deductions for earnings representing benefits or reimbursed expenses).]
(8)The Treasury may by regulations—
[F23(a)modify the effect of subsections (7) and (7A) above by amending subsection (7B) so as to include any enactment contained in the Income Tax Acts within the meaning of “excluded provision”; or]
(b)make such amendments of [F24subsections (7) to (7B)] above as appear to them to be necessary or expedient in consequence of any alteration of the provisions of the Income Tax Acts relating to the charge to tax [F25on employment income].
(9)The Treasury may by regulations provide—
(a)for Class 1A contributions not to be payable, in prescribed circumstances, by prescribed persons or in respect of prescribed persons [F26, general earnings or termination awards];
(b)for reducing Class 1A contributions in prescribed circumstances.
F27(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F28(11)The Treasury may by regulations modify the law relating to Class 1A contributions in the case of an employed earner's employment which is treated as existing by virtue of regulations under section 4AA.]
[F29(12)In this section “termination award” means a payment or benefit received by an earner (or an earner's spouse, civil partner, blood relative or dependant) in connection with the termination of the earner's employment.]]
Textual Amendments
F1S. 10 substituted (with effect in relation to the tax year beginning with 6.4.2000 and subsequent tax years) by Child Support, Pensions and Social Security Act 2000 (c. 19), ss. 74(2), 86 (with s. 74(8))
F2Words in s. 10 heading omitted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by virtue of National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(10), 5(3); S.I. 2020/285, reg. 2
F3S. 10(1)(a) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(2) (with Sch. 7)
F4S. 10(1)(b) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(3) (with Sch. 7)
F5Words in s. 10(1)(b)(ii) substituted (with effect for the tax year 2016-17 and subsequent tax years in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 23(2)
F6Words in s. 10(1)(c) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(4) (with Sch. 7)
F7Words in s. 10(1) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(5) (with Sch. 7)
F8S. 10(1A)-(1C) inserted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I. ) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(2), 5(3); S.I. 2020/285, reg. 2
F9Words in s. 10(2) substituted (6.4.2020 subject to transitional provisions in reg. 3 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 3(2), 5(3); S.I. 2020/285, reg. 3
F10Words in s. 10(2) inserted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(3), 5(3); S.I. 2020/285, reg. 2
F11Words in s. 10(2)(b) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(6) (with Sch. 7)
F12S. 10(3A) inserted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(4), 5(3); S.I. 2020/285, reg. 2
F13Words in s. 10(4) inserted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(5), 5(3); S.I. 2020/285, reg. 2
F14Words in s. 10(4) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(7)(a) (with Sch. 7)
F15Word in s. 10(4) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(7)(b) (with Sch. 7)
F16S. 10(4A) inserted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(6), 5(3); S.I. 2020/285, reg. 2
F17Words in s. 10(5) substituted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(7), 5(3); S.I. 2020/285, reg. 2
F18Words in s. 10(5) substituted (with effect in relation to the tax year 2003-04 and subsequent tax years) by National Insurance Contributions Act 2002 (c. 19), s. 8(2), Sch. 1 para. 2
F19Words in s. 10(6) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(8) (with Sch. 7)
F20S. 10(7)-(7B) substituted for s. 10(7) (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(9) (with Sch. 7)
F21Word in s. 10(7B)(a) omitted (5.4.2007 with effect in relation to the tax year beginning on 6.4.2006 and subsequent tax years) by virtue of The Social Security Contributions and Benefits Act 1992 (Modification of Section 10(7B)) Regulations 2007 (S.I. 2007/799), regs. 1, 2(a)
F22S. 10(7B)(aa) inserted (5.4.2007 with effect in relation to the tax year beginning on 6.4.2006 and subsequent tax years) by The Social Security Contributions and Benefits Act 1992 (Modification of Section 10(7B)) Regulations 2007 (S.I. 2007/799), regs. 1, 2(b)
F23S. 10(8)(a) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(10) (with Sch. 7)
F24Words in s. 10(8)(b) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(11)(a) (with Sch. 7)
F25Words in s. 10(8)(b) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(11)(b) (with Sch. 7)
F26Words in s. 10(9)(a) substituted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(8), 5(3); S.I. 2020/285, reg. 2
F27S. 10(10) repealed (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 174(13), Sch. 8 Pt. 1 (with Sch. 7)
F28S. 10(11) inserted (13.3.2014) by National Insurance Contributions Act 2014 (c. 7), s. 14(4)
F29S. 10(12) inserted (6.4.2020 subject to transitional provisions in reg. 2 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 1(9), 5(3); S.I. 2020/285, reg. 2
(1)This section applies, where—
(a)a Class 1A contribution is payable for any tax year in respect of the whole or any part of [F31general earnings] received by an earner;
(b)[F32the general earnings, in so far as they are ones in respect of which] such a contribution is payable, [F33consist] in a benefit provided for the earner or a member of his family or household;
(c)the person providing the benefit is a person other than the person (“the relevant employer”) by whom, but for this section, the Class 1A contribution would be payable in accordance with section 10(2) above; and
(d)the provision of the benefit by that other person has not been arranged or facilitated by the relevant employer.
[F34(1A)This section does not apply if the benefit is a sporting testimonial payment (see section 10ZBA).]
(2)For the purposes of this Act if—
(a)the person providing the benefit pays an amount for the purpose of discharging any liability of the earner to income tax for any tax year, and
(b)the income tax in question is tax chargeable in respect of the provision of the benefit or of the making of the payment itself,
the amount of the payment shall be treated as if it were [F35general earnings] consisting in the provision of a benefit to the earner in that tax year and falling, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner.
(3)Subject to subsection (4) below, the liability to pay any Class 1A contribution in respect of—
(a)the benefit provided to the earner, and
(b)any further benefit treated as so provided in accordance with subsection (2) above,
shall fall on the person providing the benefit, instead of on the relevant employer.
(4)Subsection (3) above applies in the case of a Class 1A contribution for the tax year beginning with 6th April 2000 only if the person providing the benefit in question gives notice in writing to the Inland Revenue on or before 6th July 2001 that he is a person who provides benefits in respect of which a liability to Class 1A contributions is capable of falling by virtue of this section on a person other than the relevant employer.
(5)The Treasury may by regulations make provision specifying the circumstances in which a person is or is not to be treated for the purposes of this Act as having arranged or facilitated the provision of any benefit.
(6)In this section references to a member of a person’s family or household shall be construed in accordance with [F36section 721(5) of ITEPA 2003].]
Textual Amendments
F30Ss. 10ZA, 10ZB inserted (with effect in relation to the tax year beginning with 6.4.2000 and subsequent tax years) by Child Support, Pensions and Social Security Act 2000 (c. 19), ss. 75(1), 86 (with s. 75(3))
F31Words in s. 10ZA(1)(a) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 175(2) (with Sch. 7)
F32Words in s. 10ZA(1)(b) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 175(3)(a) (with Sch. 7)
F33Word in s. 10ZA(1)(b) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 175(3)(b) (with Sch. 7)
F34S. 10ZA(1A) inserted (6.4.2020 subject to transitional provisions in reg. 3 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 3(3), 5(3); S.I. 2020/285, reg. 3
F35Words in s. 10ZA(2) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 175(4) (with Sch. 7)
F36Words in s. 10ZA(6) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 175(5) (with Sch. 7)
(1)In section 10ZA above references to the provision of a benefit include references to the provision of a non-cash voucher.
(2)Where—
(a)a non-cash voucher is received by any person from [F37employment which is [F38lower-paid employment as a minister of religion], and]
(b)the case would be one in which the conditions in section 10ZA(1)(a) to (d) above would be satisfied in relation to the provision of that voucher [F39if that employment were not [F40lower-paid employment as a minister of religion]],
sections 10 and 10ZA above shall have effect in relation to the provision of that voucher, and to any such payment in respect of the provision of that voucher as is mentioned in section 10ZA(2) above, [F41as if that employment were not [F40lower-paid employment as a minister of religion]].
(3)In this section “non-cash voucher” has the same meaning as in [F42section 84 of ITEPA 2003].]
Textual Amendments
F30Ss. 10ZA, 10ZB inserted (with effect in relation to the tax year beginning with 6.4.2000 and subsequent tax years) by Child Support, Pensions and Social Security Act 2000 (c. 19), ss. 75(1), 86 (with s. 75(3))
F37Words in s. 10ZB(2)(a) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 176(2) (with Sch. 7)
F38Words in s. 10ZB(2)(a) substituted (with effect for the tax year 2016-17 and subsequent tax years in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 23(3)(a)
F39Words in s. 10ZB(2)(b) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 176(3) (with Sch. 7)
F40Words in s. 10ZB(2) substituted (with effect for the tax year 2016-17 and subsequent tax years in accordance with s. 13(4) of the amending Act) by Finance Act 2015 (c. 11), Sch. 1 para. 23(3)(b)
F41Words in s. 10ZB(2) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 176(4) (with Sch. 7)
F42Words in s. 10ZB(3) substituted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 176(5) (with Sch. 7)
(1)This section applies where—
(a)a Class 1A contribution is payable for any tax year in respect of the whole or any part of general earnings received by an earner;
(b)the general earnings, in so far as they are ones in respect of which such a contribution is payable, consist in a sporting testimonial payment; and
(c)the controller of the sporting testimonial is not the person (“the relevant employer”) by whom, but for this section, the Class 1A contribution would be payable in accordance with section 10(2).
(2)The controller of the sporting testimonial, instead of the relevant employer, is liable to pay any Class 1A contribution in respect of the sporting testimonial payment.
(3)Subsection (4) applies if—
(a)the controller of the sporting testimonial pays an amount (“the amount to cover tax”) for the purpose of discharging any liability of the earner to income tax for any tax year (“the relevant year”), and
(b)the income tax in question is tax chargeable in respect of the sporting testimonial payment or of the amount to cover tax.
(4)For the purposes of this Act the amount to cover tax is to be treated as if it were general earnings consisting in the making of a sporting testimonial payment to the earner in the relevant year and falling, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner.
(5)The controller of the sporting testimonial, instead of the relevant employer, is liable to pay any Class 1A contribution in respect of any further sporting testimonial payment treated as made to the earner in accordance with subsection (4).
(6)Expressions used in this section and section 226E of ITEPA 2003 (sporting testimonial payments) have the same meaning as in that section.]
Textual Amendments
F43S. 10ZBA inserted (6.4.2020 subject to transitional provisions in reg. 3 of the commencing S.I.) by National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (c. 23), ss. 3(4), 5(3); S.I. 2020/285, reg. 3
(1)The Treasury may by regulations make such provision as appears to the Treasury to be expedient for any purpose of the law relating to Class 1A contributions in consequence of any relevant retrospective tax provision—
(a)which is passed or made at or before the time when the regulations are made, or
(b)which may be passed or made after that time.
(2)“Relevant retrospective tax provision” means a provision of the Income Tax Acts which—
(a)has retrospective effect, and
(b)affects the amount of general earnings received by an earner from an employment on which he is chargeable to income tax under the employment income Parts of ITEPA 2003 for a tax year.
(3)It does not matter whether the relevant retrospective tax provision was passed or made before the commencement day.
(4)Regulations under this section may, in particular, make provision—
(a)modifying any provision of any enactment (including this Act and any enactment passed or made on or after the commencement day);
(b)for any provision of any such enactment to apply in such cases, and with such modifications (if any), as the regulations may prescribe.
(5)Regulations under this section may be made so as to have retrospective effect but must not have effect in relation to any time before 2nd December 2004.
(6)In particular, regulations under this section made by virtue of subsection (5)—
(a)may affect matters determined before the time when the regulations are made, and
(b)may provide for those matters to be redetermined accordingly.
(7)Regulations under this section—
(a)may not impose any liability to pay a Class 1A contribution, and
(b)may not increase the amount of any Class 1A contribution.
(8)The powers conferred by this section are without prejudice to—
(a)any liability to pay a Class 1A contribution which arises by virtue of any relevant retrospective tax provision, and
(b)any powers conferred by or by virtue of any other provision of this Act or any other enactment.
(9)In particular, any modification of any provision of an instrument by regulations under this section is without prejudice to any other power to amend or revoke the provisions of the instrument (including the modified provision).
(10)For the purposes of this section—
“the commencement day” means the day on which the National Insurance Contributions Act 2006 was passed;
“enactment” includes an instrument made under an Act.]
Textual Amendments
F44S. 10ZC inserted (30.3.2006) by National Insurance Contributions Act 2006 (c. 10), ss. 3(1), 9