National Insurance Contributions Act 2006

National Insurance Contributions Act 2006

2006 CHAPTER 10

Commentary on Sections

Agreements and Elections

Section 5 – Agreements and joint elections: Great Britain

57. Subsection (1) introduces changes to be made to Schedule 1 to the CBA 1992 which contains the rules on Agreements and Elections that allow the employer to recover from, or pass on to, the employee any secondary NICs liability arising on certain securities based remuneration.

58. Subsection (2) amends paragraph 3A(2A) of Schedule 1. The change prevents Agreements for the recovery of contributions by the employer from the employee (of the kind allowed under that provision) from being used to recover any secondary contributions resulting from the imposition, by virtue of new section 4B(2), of a retrospective liability to Class 1 NICs.

59. Subsection (3) amends paragraph 3B(7B) of Schedule 1. Provisions in paragraph 3B allow the employer and the employee to enter into a joint election for the transfer of secondary NICs liability arising from securities options, restricted securities and convertible securities to the employee. The change will prevent the transfer of any secondary NICs liability that is due as a result of retrospective liability to Class 1 NICs imposed by virtue of section 4B(2).

60. Subsection (4) provides that the amendments made by the section have effect in relation to agreements or elections entered into before, on or after the time the Act received Royal Assent (30 March 2006).