[F138A Reduced rates of Class 1 contributions and rebates.N.I.
[F2(1)Subsections (2) to (3) apply where—
(a)the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment; and
(b)the earner’s service in the employment is service which qualifies him for a pension provided by a money purchase contracted-out scheme,
and in subsections (2) and (2A) “the relevant part”, in relation to those earnings, means so much of those earnings as exceeds the current lower earnings limit but not the current upper earnings limit for that week (or the prescribed equivalents if the earner is paid otherwise than weekly).
(2)The amount of the primary Class 1 contribution in respect of the relevant part of those earnings (“amount A”) shall be reduced by an amount equal to the appropriate flat-rate percentage of that part.
(2A)The amount of any secondary Class 1 contribution in respect of the earnings (“amount B”) shall be reduced by an amount equal to the appropriate flat-rate percentage of the relevant part of those earnings (“amount C”).
(2B)Where amount C exceeds amount B, the excess shall be set off against the amount which the secondary contributor is liable to pay (under paragraph 3 of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992) in respect of amount A.]
(3)The [F3Inland Revenue] shall, except in prescribed circumstances or in respect of prescribed periods, pay in respect of that earner and that tax week to the trustees or managers of the scheme or, in prescribed circumstances, to a prescribed person, the amount by which—
(a)the appropriate age-related percentage of that part of those earnings,
exceeds
(b)the appropriate flat-rate percentage of that part of those earnings.
(4)Regulations [F4made by the Secretary of State] may make provisions—
(a)as to the manner in which and time at which or period within which payments under subsection (3) are to be made,
(b)for the adjustment of the amount which would otherwise be payable under that subsection so as to avoid the payment of trivial or fractional amounts,
(c)for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, payments under subsection (3) are to be made.
(5)If the [F3Inland Revenue][F5pay] an amount under subsection (3) which [F6they][F7are] not required to pay or [F7are] not required to pay to the person to whom, or in respect of whom, the [F3Inland Revenue][F5pay] it, the [F3Inland Revenue] may recover it from any person to whom, or in respect of whom, the [F3Inland Revenue] paid it.
(6)Where—
(a)an earner has ceased to be employed in an employment, and
(b)earnings are paid to him or for his benefit within the period of six weeks, or such other period as may be prescribed, from the day on which he so ceased,. that employment shall be treated for the purposes of this section as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it
(7)Subsection (3) of section 37 applies for the purposes of this section as it applies for the purposes of that.]
[F8(8)In subsections (3), (4) and (6) “prescribed” means prescribed by regulations made by the Secretary of State.]
Textual Amendments
F1S. 38A inserted (14.3.1996 for certain purposes and 6.4.1996 for other purposes otherwise 6.4.1997) by S.I. 1995/3213 (N.I. 22), art. 134(4); S.R. 1996/91, art. 2(a)(d), Sch. Pts. I IV; S.R. 1997/192, art. 2(b)
F2S. 38A(1)-(2B) substituted (6.4.1999) for s. 38A(1)(2) by S.I. 1998/1506 (N.I. 10), art. 78(1), Sch. 6 para. 96; S.R. 1999/72, art. 2(b), Sch.
F3Words in s. 38A(3)(5) substituted (24.3.1999 for certain purposes and otherwise 1.4.1999) by S.I. 1999/671, arts. 1(2)(b), 3(1), Sch. 1 para. 52(2)(4)(a); S.R. 1999/149, art. 2(c), Sch. 2
F4Words in s. 38A(4) inserted (24.3.1999 for certain purposes and otherwise 1.4.1999) by S.I. 1999/671, arts. 1(2)(b), 3(1), Sch. 1 para. 52(3); S.R. 1999/149, art. 2(c), Sch. 2
F5Words in s. 38A(5) substituted (24.3.1999 for certain purposes and otherwise 1.4.1999) by S.I. 1999/671, arts. 1(2)(b), 3(1), Sch. 1 para. 52(4)(b); S.R. 1999/149, art. 2(c), Sch. 2
F6Word in s. 38A(5) substituted (24.3.1999 for certain purposes and otherwise 1.4.1999) by S.I. 1999/671, arts. 1(2)(b), 3(1), Sch. 1 para. 52(4)(b); S.R. 1999/149, art. 2(c), Sch. 2
F7Words in s. 38A(5) substituted (24.3.1999 for certain purposes and otherwise 1.4.1999) by S.I. 1999/671, arts. 1(2)(b), 3(1), Sch. 1 para. 52(4)(b); S.R. 1999/149, art. 2(c), Sch. 2
F8S. 38A(8) added (24.3.1999 for certain purposes and otherwise 1.4.1999) by S.I. 1999/671, arts. 1(2)(b), 3(1), Sch. 1 para. 52(5); S.R. 1999/149, art. 2(c), Sch. 2