Modifications etc. (not altering text)
C1Pt. I (ss. 1-19): power to modify conferred (7.2.1994) by 1993 c. 49, s. 35, Sch. 1 Pt. I para. 5(3)(d); S.R. 1994/17, art. 2
Pt. I (ss. 1-19) amended (1.4.1999) by 1999 c. 2, s. 3(1)(7); S.I. 1999/527, art. 2(b), Sch. 2
(1)Where—
(a)for any tax year an amount in respect of a car is by virtue of section 157 of the M1Income and Corporation Taxes Act 1988 chargeable on an earner to income tax under Schedule E; and
(b)the employment by reason of which the car is made available is employed earner’s employment,
a Class 1A contribution shall be payable for that tax year, in accordance with this section, in respect of the earner and car in question.
(2)The Class 1A contribution referred to in subsection (1) above is 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 the tax year in relation to which there is a liability to pay such a contribution; or
(b)if no such contribution is payable in relation to a relevant payment of earnings in the tax year, the person who would be liable but for section 6(1)(b) above to pay a secondary Class 1 contribution relating to the last (or only) relevant payment of earnings in the tax year.
(3)A payment of earnings is a “relevant payment of earnings” for the purposes of subsection (2) above if it is made to or for the benefit of the earner in respect of the employment by reason of which the car is made available.
(4)The amount of the Class 1A contribution referred to in subsection (1) above shall be—
(a)the Class 1A percentage of the cash equivalent of the benefit of the car to the earner in the tax year; or
(b)where for the tax year an amount in respect of fuel for the car is by virtue of section 158 of the M2Income and Corporation Taxes Act 1988 also chargeable on the earner to income tax under Schedule E, the aggregate of—
(i)the Class 1A percentage of the cash equivalent of the benefit of the fuel to the earner in the tax year; and
(ii)the amount mentioned in paragraph (a) above,
the cash equivalents of the benefit of a car or fuel being ascertained, subject to the provisions of this section, in accordance with section 157 or, as the case may be, 158 of the Income and Corporation Taxes Act 1988 and Schedule 6 to that Act.
(5)In subsection (4) above “the Class 1A percentage” means a percentage rate equal to the percentage rate for secondary Class 1 contributions specified in section 9(3) above as appropriate for the highest secondary earnings bracket for the tax year in question.
(6)In calculating for the purposes of subsection (4) above the cash equivalent of the benefit of a car or fuel—
[F1(a)the car shall not be treated as being unavailable on a day by virtue of paragraph 9(c) of Schedule 6 to the Income and Corporation Taxes Act 1988 for the purposes of section 158(5) of that Act F2 or paragraph 3 or 6 of that Schedule, unless the person liable to pay the contribution has information to show that the condition specified in paragraph 9(c) is satisfied as regards that day;
(b)the use of the car for the earner’s business travel shall be taken–
(i)for the purposes of sub-paragraph (1) of paragraph 2 of that Schedule to have amounted to less than 18,000 miles (or such lower figure as is applicable by virtue of sub-paragraph (a) of paragraph 3 of that Schedule); and
(ii)for the purposes of sub-paragraph (2) of paragraph 2 of that Schedule to have amounted to less than 2,500 miles (or such lower figure as is applicable by virtue of sub-paragraph (b) of paragraph 3 of that Schedule),
unless in either case the person liable to pay the contribution has information to show to the contrary; and]
(c)for the purposes of [F3paragraph 4] of that Schedule, the car shall be treated as not having been the car used to the greatest extent for the employee’s business travel, unless the person liable to pay the contribution has information to show the contrary.
(7)Regulations may make such amendments of this section as appear to the Department to be necessary or expedient in consequence of any alteration to section 157 or 158 of the M3Income and Corporation Taxes Act 1988 or Schedule 6 to that Act.
(8)A person shall be liable to pay different Class 1A contributions in respect of different earners, different cars and different tax years.
(9)Regulations may provide—
(a)for persons to be excepted in prescribed circumstances from liability to pay Class 1A contributions;
(b)for reducing Class 1A contributions in prescribed circumstances.
Textual Amendments
F1S. 10(6)(a)(b) substituted (6.4.1994 with effect as mentioned in art. 4(2) of the amending S.R.) by S.R. 1994/94, art. 4(1)(a)(2)
F2Section 158(5) was amended by paragraph 6(2) of Schedule 3 to the Finance Act 1993
F3Words in s. 10(6)(c) substituted (6.4.1994 with effect as mentioned in art. 4(2) of the amending S.R.) by S.R. 1994/94, art. 4(1)(b)(2)
Marginal Citations
Valid from 28/07/2000
(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 an emolument received by an earner;
(b)the emolument, in so far as it is one in respect of which such a contribution is payable, consists 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.
(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 an emolument 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 section 168(4) of the M4Income and Corporation Taxes Act 1988.]
Valid from 28/07/2000
(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 employment to which Chapter II of Part V of the M5Income and Corporation Taxes Act 1988 does not apply, 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 if that Chapter did apply to that employment,
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, as if that employment were employment to which that Chapter applied.
(3)In this section “non-cash voucher” has the same meaning as in section 141 of the M6Income and Corporation Taxes Act 1988.]