Part XIIFinance

C2162Destination of contributions

1

Contributions received by the F1Inland RevenueF2... shall be paid by F1them into the National Insurance Fund after deducting F17... the appropriate national health service allocation F17... .

F182

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F32A

F19The reference to contributions in subsection (1) above includes payments on account of contributions made in accordance with regulations under section 3(5) of the Contributions and Benefits Act (Payments on account of directors's contributions.)

3

The additions paid under section 1(5) of the Contributions and Benefits Act shall be paid, in accordance with any directions given by the Treasury, into the National Insurance Fund.

F44

There shall be paid into the National Insurance Fund—

a

so much of any interest recovered by the Inland Revenue by virtue of paragraph 6 of Schedule 1 to the Contributions and Benefits Act F42or section 101 of the Finance Act 2009F20, or from persons in Great Britain by virtue of paragraph 6 of Schedule 2 to F43the Contributions and Benefits Act, as remains after the deduction by them of any administrative costs attributable to its recovery,

b

the amounts apportioned to F32contributions under sub-paragraph (6) of Paragraph 7 of Schedule 1 to the Contributions and Benefits Act in respect of the penalties mentioned in that sub-paragraph, and

c

so much of any penalty otherwise imposed by virtue of that paragraph and recovered by the Inland Revenue as remains after the deduction by them of any administrative costs attributable to its recovery.

F294ZA

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F54ZB

F30Subsection (4)(b) and (c) above shall have effect notwithstanding any provision which treats a penalty under section 98 or 98A of the Taxes Management Act 1970 as if it were tax charged in an assessment and due and payable.

F64A

The sums recovered by the F40Inland Revenue under regulations made under paragraph 7A F28, 7B or 7BZA of Schedule 1 to the Contributions and Benefits Act in respect of interest or penalties shall be paid into the National Insurance Fund.

C15

In subsection (1) above “the appropriate national health service allocation” means F21F3150 per cent of the product of the additional rate together with —

a

in the case of primary Class 1 contributions, F222.05 per cent. of the amount estimated to be that of F7so much of the earnings in respect of which those contributions were paid as exceeded F8the primary threshold but did not exceed the upper earnings limit;

b

in the case of secondary Class 1 contributions, F231.9 per cent. of the amount estimated to be that of the F41total earnings in respect of which F9primary Class 1 contributions were paid;

c

in the case of Class 1A contributions, F231.9 per cent. of the amount estimated to be the aggregate of the F26general earningsF46and the amounts chargeable to income tax under section 403 of the Income Tax (Earnings and Pensions) Act 2003 used in calculating those contributions;

F10ca

in the case of Class 1B contributions, F231.9 per cent of the amount estimated to be the aggregate of the F27general earnings and the amounts of income tax in respect of which those contributions were paid;

d

in the case of Class 2 contributions, 15.5 per cent. of the amount estimated to be the total of those contributions;

e

in the case of Class 3 contributions, 15.5 per cent. of the amount estimated to be the total of those contributions; and

F44ea

in the case of Class 3A contributions, 15.5 per cent of the amount estimated to be the total of those contributions;

f

in the case of Class 4 contributions, F242.15 per cent of the amount estimated to be that of so much of the profits or gains, or earnings, in respect of which those contributions were paid as exceeded the lower limit specified in paragraph (a) of subsection (3) of section 15, and in paragraph (a) of subsection (1A) of section 18, of the Contributions and Benefits Act but did not exceed the upper limit specified in those subsections.

F165A

In subsection (5) above “the product of the additional rate” means the amount estimated to be the aggregate of—

a

so much of the total of primary Class 1 contributions as is attributable to section 8(l)(b) of the Contributions and Benefits Act (additional primary percentage);

b

so much of the total of Class 4 contributions under section 15 of that Act as is attributable to subsection (3)(b) of that section (additional Class 4 percentage); and

c

so much of the total of Class 4 contributions payable by virtue of section 18 of that Act as is attributable to subsection (1A)(B) of that section (additional Class 4 percentage).

6

In F25subsections (5) and (5A) above “estimated” means estimated by the F11Inland Revenue in any manner which after consulting the Government Actuary or the Deputy Government Actuary F11the Inland Revenue consider to be appropriate and which the Treasury has approved.

F126A

In the case of earners paid other than weekly, the reference in paragraph (a) of subsection (5) above to F13the primary threshold or the upper earnings limit shall be taken as a reference to the equivalent of F13that threshold or limit prescribed under section 5(4) of the Contributions and Benefits Act.

7

F14The Treasury may by order amend any of paragraphs (a) to (f) of subsection (5) above in relation to any tax year, by substituting for the percentage for the time being specified in that paragraph a different percentage.

8

No order under section (7) above shall substitute a figure which represents an increase or decrease in the appropriate national health service allocation of more than—

a

0.1 per cent. of the relevant earnings, in the case of paragraph (a) or (b);

b

0.1 per cent. of the relevant aggregate, in the case of paragraph (c) F15or (ca);

c

4 per cent. of the relevant contributions, in the case of paragraph (d) F45, (e) or (ea); or

d

0.2 per cent. of the relevant earnings, in the case of paragraph (f).

9

From the national health service allocation in respect of contributions of any class there shall be deducted such amount as the F33Inland Revenue may estimate to be the portion of the total expenses incurred by F34them or any other government department in collecting contributions of that class which is fairly attributable to that allocation, and F35the remainder shall be paid the Inland Revenue to the Secretary of State towards the cost—

a

of the national health service in England;

b

of that service in Wales; and

c

of that service in Scotland,

in such shares as the Treasury may determine.

10

The F36Inland Revenue shall pay any amounts deducted in accordance with subsection (9) above into the Consolidated Fund.

F3911

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12

The F37Inland Revenue may make regulations modifying this section, in such manner as F38they think appropriate, in relation to the contributions of persons referred to in the following sections of the Contributions and Benefits Act—

a

section 116(2) (H.M. forces);

b

section 117(1) (mariners, airmen, etc.);

c

section 120(1) (continental shelf workers),

and in relation to any contributions which are reduced under section 6(5) of that Act.