The Social Security (Contributions) Regulations 2001

If this regulation applies the amount of any Class 1A contribution payable for the year by the person liable to pay such contribution shall be reduced F95... by deducting from that amount an amount equal to the fraction—

$\frac{X-1}{X}$

of the amount which would be payable but for this regulation.

Here X is the total number of employments in respect of which the thing is provided or made available.

If the conditions mentioned in paragraphs (2) to (5) are satisfied, the person who would otherwise be liable to pay the Class 1A contribution for that year in respect of the employer earner and the car mentioned in those paragraphs shall be excepted from that liability.

The first condition is that the car is made available to an earner who is disabled.

The second condition is that the car is made available to the earner by reason of his employment.

The third condition is that the car is made available account of the earner’s disability for the purposes of, or for purposes which include assisting, the earner’s travelling between the earner’s home and place of employment.

The fifth condition is that no prohibited private use of the car has been made in the year.

The employee falls within this paragraph if he is subject to the legislation of a contracting party, other than the United Kingdom, to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as adjusted by the Protocol signed at Brussels on 17th March 1993 F118.

The employee falls within this paragraph if he is subject to the legislation of a country outside the United Kingdom in respect of which there is an Order in Council under section 179 of the Administration Act (reciprocal agreements with countries outside the United Kingdom) F119 giving effect to a reciprocal agreement.

If a person is excepted from liability to pay a Class 1B contribution for any year under paragraphs (1) to (3), he shall be entitled, if he so wishes, to pay that contribution for that year.

If a self-employed earner is excepted from liability to pay a Class 2 contribution for any contribution week by virtue of paragraph (1), he shall be entitled, subject to Part 6, to pay a contribution for that week if he so wishes.

A self-employed earner who desires to be excepted from liability to pay Class 2 contributions by virtue of section 11(4) of the Act (exception from such liability for Class 2 contributions on grounds of small earnings) shall make an application for that purpose to the Board who, if they grant the application, shall issue to the applicant a certificate of exception.

Any such application and certificate shall be in such form as may for the time being be approved by the Board.

An applicant for, and a holder of, a certificate of exception shall furnish to the Board such information and evidence relating to his earnings as the Board may require on the making of the application and at any subsequent time.

Subject to the conditions specified in paragraph (5), a certificate of exception shall be in force for such period as may be specified in the certificate.

Paragraph 2(b)(iii) does not apply to Northern Ireland.

Subject to sections 13(2) and 14(1) of the Act (Class 3 contributions only payable for purposes of satisfying certain contribution conditions and circumstances in which persons shall not be entitled to pay Class 3 contributions) and these Regulations, any person who is over the age of 16 and fulfils the conditions as to residence or presence in Great Britain or in Northern Ireland prescribed in regulation 145, may, if he so wishes, pay Class 3 contributions.

The entitlement of a person to pay a Class 3 contribution is subject to the condition set out in paragraph (2).

The condition is that a person may not pay a Class 3 contribution for any part of the period to which that person’s Communities transfer relates.

For the purposes of this regulation, paragraph (3) of regulation 148A applies to determine the meaning of a Communities transfer in the same way as it applies to determine the meaning of that expression for the purposes of that regulation.

This regulation applies to Class 3 contributions payable in respect of the tax years 1996-97 to 2001-02 (“the relevant years”).

Nothing in this regulation limits the application of F138regulation 50 or 50B.

This regulation applies to Class 3 contributions payable in respect of the tax years 1993-94 to 2007-08 (“the relevant years”).

The contributor may pay a Class 3 contribution in respect of any week to which the removed earnings related, provided this payment is made within the time specified in paragraph (5).

The time within which the contribution may be paid is the period beginning with 1st October 2007 and ending on 5th April 2014.

Nothing in this regulation limits the application of regulation 50 or 50A.

Where contributions (other than Class 1A, Class 1B or Class 4 contributions) are paid which are of the wrong class, or at the wrong rate, or of the wrong amount, the Board may treat them as paid on account of contributions properly payable under the Act.

Subject to regulations 51 and 57 and to paragraph (2), where a contributor has paid a Class 3 contribution which by virtue of section 14(1) of the Act (restriction on the right to pay Class 3 contributions) or regulation 49 he was not entitled to pay, the Board shall, on application of the contributor, return that contribution to the contributor.

Paragraph (1)(b) is subject to the qualification that, if the Secretary of State certifies that a deduction of an additional amount of income support or income-based jobseeker’s allowance has been made under regulation 13 of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 (“the 1988 Regulations”) F153 (sums to be deducted in calculating the recoverable amount), paragraph (3) applies.

If this paragraph applies, the amount to be returned shall be reduced by applying the formula—

$\mathrm{CB}-\mathrm{IS}$

Here—CB is the amount of contributory benefit specified in paragraph (1)(b) and

IS is the amount of income support or income-based jobseeker’s allowance specified in regulation 13(b) of the 1988 Regulations.

In this regulation the expression “contributions equivalent premium” has the same meaning as in section 55(2) F154 of the Pensions Act.

Where any payment of earnings is made in one year which, but for regulation 7(3), would by virtue of that regulation have been treated as paid at an interval falling within another year, the contributions paid in respect of those earnings shall, on the application of the employed earner or the direction of the Secretary of State, be treated, for the purposes of entitlement to benefit, as paid in respect of that other year.

Section 19A(1) of the Act F155 (repayment of Class 1, 1A or 1B contributions paid in error) does not apply where the three circumstances prescribed in paragraphs (2), (3) and (4) exist.

The first circumstance is that, in respect of the earnings derived in year 1 from an employment of the earner, Class 1, 1A or 1B contributions have been paid.

The third circumstance is that the question, reference, request or appeal referred to in paragraph (3) has not been determined or finally disposed of, as the case may be, at the end of year 2.

For the purposes of this regulation—

In paragraph (1)(a) “the first contribution condition”, in relation to a contribution-based jobseeker’s allowance means the condition specified in section 2(1)(a) of the Jobseeker’s Act 1995F159.

If a person who was entitled, but not liable, to pay a Class 2 contribution (“the contributor”) fails to pay that contribution within the period within which it may be paid, and the condition in paragraph (2) is satisfied, the contribution may be paid within such further period as an officer of the Board may direct.

This regulation applies to Class 2 contributions which a person (“the contributor”) was entitled, but not liable, to pay in respect of the tax years 1993-94 to 2007-08 (“the relevant years”).

The contributor may pay a Class 2 contribution in respect of any week to which the removed earnings related, provided this payment is made within the time specified in paragraph (5).

The time within which the contribution may be paid is the period beginning with 1st October 2007 and ending on 5th April 2014.

Nothing in this regulation limits the application of regulation 61.

In this regulation “undertaking” means an arrangement between the Board and an earner under which the Board have agreed to accept payment of arrears of Class 2 contributions by instalments.

This regulation applies to any Class 2 or Class 3 contribution which would when paid fall to be computed at a rate or, as the case may be, an amount other than that applicable in the contribution year in accordance with section 12(3) or 13(6) of the Act.

Where a Class 3 contribution would otherwise fall to be calculated in accordance with section 13(6) of the Act, but it is shown F165to the satisfaction of an officer of the Board that the contributor has not paid that contribution before the end of the second year following the contribution year by reason of ignorance or error on the part of the earner, not being ignorance or error due to any failure on his part to exercise due care and diligence, the amount of that contribution shall be computed by reference to the amount of such a contribution applicable to the period for which the contribution is paid.

If this paragraph applies to a contribution, the amount of that contribution shall be calculated in accordance with section 13(6) of the Act as if the contribution had been paid at the time when the relevant period commenced.

Notwithstanding sections 12(3) and 13(6) of the Act, the amount of the contribution shall be calculated by reference to the weekly rate which would have been payable if it had been paid during the tax year 2005-06.

Subject to the provisions of regulations 68 and 70, earnings-related contributions and Class 1B contributions shall be paid, accounted for and recovered in like manner as income tax deducted from the F171general earnings from an office or employment by virtue of regulations under section 684 of ITEPA 2003 (PAYE Regulations).

F172...The provisions contained in Schedule 4, (which contains provisions derived from F173the PAYE Regulations with extensions and modifications) shall apply to and for the purposes of earnings-related contributions and Class 1B contributions.

The Board may authorise arrangements under which earnings-related contributions are to be paid in a different manner from that prescribed by regulation 67.

The provisions of regulation 67 shall be in addition to any remedy otherwise available for the recovery of earnings-related contributions.

In the cases prescribed by paragraph (2), contributions shall be paid to the Board in accordance with regulations 71 to 83.

The cases prescribed by this paragraph are cases where an employer is liable to pay a Class 1A contribution to the Board.

In this regulation, and in regulations 71 to 83, “employer” F175means the person liable, in accordance with section 10(2) or 10ZA(4) F176 of the Act, to pay a Class 1A contribution.

Subject to regulation 72(2) or 73(2), as the case may be, an employer who is liable to pay a Class 1A contribution to the Board shall pay that contribution to them not later than 19th July F177or, where payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, not later than 22nd July in the year immediately following the end of the year in respect of which it is payable.

A Class 1A contribution paid to the Board in accordance with paragraph (1) shall be shown in a return made to them in accordance with regulation 80(1).

The employer shall include the amount of any Class 1A contribution which is payable in accordance with paragraph (2)(a) in the return required by regulation 80(1) for the relevant final year.

In this regulation—

The employer shall include the amount of any Class 1A contribution which is payable in accordance with paragraph (2)(a) in the return required by regulation 80 for the relevant final year.

In this regulation—

A notice may be given by the Board under paragraph (1) notwithstanding that an amount of a Class 1A contribution has been paid to them by the employer under regulation 71(1), 72(2) or 73(2), in respect of the year in question, if they are not satisfied that the amount so paid is the full amount which the employer is liable to pay to them for that year and the provisions of this regulation shall have effect accordingly.

Upon receipt of a return made by an employer under paragraph (1) the Board may prepare a certificate showing the amount of a Class 1A contribution which the employer is liable to pay to them for the year in question.

The production of the return made by the employer under paragraph (1) and of the certificate of the Board under paragraph (3) shall be sufficient evidence that the amount shown in the certificate is the amount of a Class 1A contribution which the employer is liable to pay to the Board in respect of the year in question.

Any document purporting to be a certificate under paragraph (3) shall be presumed to be such a certificate until the contrary is proved.

The production of a certificate such as is mentioned in paragraph (2)(b) shall, until the contrary is established, be sufficient evidence that the employer is liable to pay to the Board the amount shown in the certificate, and any document purporting to be such a certificate shall be deemed to be such a certificate until the contrary is proved.

A notice may be given by the Board under paragraph (1) notwithstanding that an amount of a Class 1A contribution has been paid to them by the employer under regulation 71(1), 72(2) or 73(2) in respect of the year in question, if, after seeking the employer’s explanation as to the amount of a Class 1A contribution paid, they are not satisfied that the amount so paid is the full amount which the employer is liable to pay to them in respect of that year, and this regulation shall have effect accordingly, but paragraph (2) shall not apply if, during the period allowed in the notice, the employer satisfies the Board that no further amount of a Class 1A contribution is due in respect of that year.

Where, during the period allowed in a notice given by the Board under paragraph (1), the employer claims, but does not satisfy the Board, that the payment of a Class 1A contribution made in respect of the year specified in the notice is the full amount of a Class 1A contribution which he is liable to pay to the Board in respect of that year, the employer may require the Board to inspect his documents and records as if they had called upon him to produce those documents and records in accordance with paragraph 26(1) of Schedule 4.

If the employer does require the Board to inspect his documents and records in accordance with paragraph (6), the provisions of paragraph 26 of Schedule 4 shall apply in relation to that inspection and the notice given by the Board under paragraph (1) shall be disregarded.

Where an employer has not paid a Class 1A contribution, which he is liable to pay, by the date which applies to him under regulation 71(1), 72(2) or 73(2) (as the case may be), any contribution not so paid shall carry interest at the rate applicable under paragraph 6(3) of Schedule 1 to the Act from the reckonable date until payment.

Interest payable under this regulation shall be recoverable as if it were a Class 1A contribution which an employer is liable to pay to the Board under regulation 71(1), 72(2) or 73(2), as the case may be).

A contribution to which paragraph (1) applies shall carry interest from the reckonable date even if that date is a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882F192.

A certificate of the Board that any amount of interest payable under this regulation has not been paid to the Board or, to the best of the Board’s knowledge and belief, to any person acting on their behalf, shall be sufficient evidence that the employer is liable to pay to the Board the amount of interest shown on the certificate and that the sum is unpaid and due to be paid, and any document purporting to be such a certificate shall be deemed to be a certificate until the contrary is proved.

For the purposes of this regulation, “the reckonable date” means the 19th July F193or where payment is made by an approved method of electronic communications in respect of earnings paid after 5th April 2004, the 22nd July in the year immediately following the end of the year in respect of which the Class 1A contribution is payable to the Board.

Where interest is payable in accordance with regulation 76 it shall be remitted for the period commencing on the first relevant date and ending on the second relevant date in the circumstances specified in paragraph (2).

For the purposes of paragraph (1), the circumstances are that the liability, or a greater liability, to pay interest in respect of a Class 1A contribution arises as the result of an official error being made.

For the purposes of this regulation—

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The return shall include a declaration by the person making the return to the effect that the return is, to the best of his knowledge, correct and complete.

Where the employer is a body corporate, the return referred to in this regulation shall be signed by the secretary or by a director of the body corporate.

If, by the date which applies to him under regulation 71(1), 72(2) or 73(2) (as the case may be), an employer has failed to pay a Class 1A contribution which he is liable to pay, the Board may prepare a certificate showing the total amount of a Class 1A contribution remaining unpaid in respect of the year in question and regulation 76(1) and (2) shall, with any necessary modifications, apply to the amount shown in that certificate.

The penalty referred to in paragraph (2)(b) is without prejudice to any penalty which may be imposed under paragraph (2)(a) and may be imposed within six years after the date of the failure referred to in paragraph (2) or at any later time within three years of the final determination of the amount of a Class 1A contribution by reference to which the amount of that penalty is to be ascertained.

The total penalty payable under paragraph (2)(a) shall not exceed the total amount of Class 1A contributions payable in respect of the year to which the return in question relates.

Any penalty imposed in accordance with this regulation shall be recoverable as if it were a Class 1A contribution which the employer is liable to pay to the Board under regulation 71.

A penalty imposed in accordance with this regulation shall be due and payable at the end of 30 days beginning with the date on which notice of the decision to impose it was issued.

The Board may, in their discretion, mitigate any penalty, or stay or compound any proceedings for any penalty, imposed in accordance with the provisions of this regulation, and may also, after judgment, further mitigate or entirely remit such a penalty.

Section 100 of the Management Act F198 (determination of penalties by an officer of the Board) shall apply with any necessary modifications in relation to the determination of any penalty under regulation 81 as it applies to the determination of a penalty under the Taxes Acts.

Section 100D F199 of the Management Act (penalty proceedings before court) shall apply with any necessary modifications in relation to any proceedings for a penalty under regulation 81 as it applies to proceedings for a penalty under the Taxes Acts.

Section 104 of the Management Act (saving for criminal proceedings) shall apply with any necessary modifications in relation to the provisions of regulation 81 as it applies to the provisions of the Taxes Acts.

Section 105 of the Management Act (evidence in cases of fraudulent conduct) F200 shall apply with any necessary modifications in respect of any proceedings for a penalty under regulation 81, or on appeal against the determination of such a penalty, as it applies in relation to any proceedings for a penalty, or on appeal against the determination of a penalty, under the Management Act.

In this regulation—

In the circumstance prescribed by paragraph (2), an amount in respect of a Class 1A contribution that falls to be repaid in accordance with these Regulations may be set off against liabilities under them to the extent prescribed in paragraph (3).

The circumstance is that an employer has paid to the Board in accordance with regulations 70 to 82 an amount, in respect of Class 1A contributions, which he was not liable to pay.

The extent of the set-off is that the employer shall be entitled to deduct the amount which he was not liable to pay in respect of Class 1A contributions from any payment in respect of secondary earnings-related contributions which he is subsequently liable to pay to a Collector under paragraph 10 or 11 of Schedule 4 for any income tax period in the same year.

In this regulation “Collector”, “income tax period” and “year” have the meanings given in paragraph 1(2) of Schedule 4.

If in accordance with an arrangement authorised under regulation 68, notwithstanding paragraph 3(1) of Schedule 1 to the Act (method of paying Class 1 contributions), an earner is required to make direct payments in respect of primary Class 1 contributions in respect of earnings paid to him or for his benefit, the following provisions of this regulation apply.

Where, as respects any employed earner’s employment the employer is a person who by reason of any such international treaty or convention is exempt from the provisions of the Act, he may, if he so wishes, pay contributions in respect of any earnings paid to or for the benefit of the earner in respect of the employment, or contributions under section 10 of the ActF207..., in either case to the same extent to which he could have paid such contributions if he had not been so exempt.

In this regulation “employer” has the same meaning as it has in paragraph 30 of Schedule 4.

Where Class 2 or Class 3 contributions are payable by a person other than in accordance with arrangements approved under regulation 90, such contributions shall be paid in accordance with paragraph (2), (3) or (4), as the case may be.

In this regulation “contribution quarter” means one of the four periods of not less than 13 contribution weeks commencing on the first day of the first, fourteenth, twenty-seventh or fortieth contribution week, as the case may be, in any year.

For the purposes of these Regulations, information is taken to have been delivered to an official computer system by an approved method of electronic communications only if it is accepted by that official computer system.

References in these Regulations to information and to the delivery of information must be construed in accordance with section 135(8) of the Finance Act 2002 (mandatory e-filing).

A document which purports to be a certificate given in accordance with paragraph (1) is presumed to be such a certificate unless the contrary is proved.

But this does not apply if the person proves that the information was delivered without the person’s knowledge or connivance.

The time of receipt or despatch of any information delivered by an approved method of electronic communications is presumed, unless the contrary is proved, to be the time recorded on an official computer system.

The time of receipt or despatch of any payment sent by a method of electronic communications is presumed, unless the contrary is proved, to be the time recorded on an official computer system.

This regulation applies to information which is required to be delivered to the Board or to an official computer system under a provision of these Regulations.

The use of a method of electronic communications for the purpose of delivering such information is conclusively presumed not to have resulted in the delivery of that information, unless that method of electronic communications is for the time being approved for delivery of that kind under that provision.

If an e-payment notice has been issued to an employer in respect of a tax year under regulation 199 of the PAYE Regulations (large employers required to make specified payments under those Regulations electronically), he must pay the specified payment using an approved method of electronic communications.

Paragraph (1) applies regardless of whether a payment of tax is due under regulation 68 of the PAYE Regulations (payment and recovery of tax by employer).

If the Board have given a direction under regulation 199(3) of the PAYE Regulations requiring a particular method of electronic communications to be used in the case of an employer, he must use that method.

This regulation does not apply to a payment of contributions, whether primary or secondary, in respect of retrospective earnings where those earnings relate to a tax year which is closed (see paragraph 1(2) of Schedule 4) at the time the relevant retrospective contributions regulations come into force

This regulation applies if an employer is required to make a specified payment by an approved method of electronic communications in accordance with regulation 90H.

The employer is in default if the specified payment is not received in full by the Board (whether by an approved method of electronic communications or otherwise) on or before the date by which that payment is required in accordance with paragraph 10 of Schedule 4.

Inability to pay is not a reasonable excuse for the purposes of sub-paragraph (3)(a).

A payment is not treated as received in full by the Board on or before the date by which that payment is required in accordance with paragraph 10 of Schedule 4 unless it is made in a manner which secures (in a case where the payment is made otherwise than in cash) that, on or before that date, all transactions can be completed which need to be completed before the whole amount of the payment becomes available to the Board.

The Board must issue a default notice to any person who appears to be in default under regulation 90I in respect of a specified payment.

A person may appeal against a default notice by giving notice to the Board within 30 days of the issue of the default notice.

The ground of appeal is that the person is not in default.

If the appeal is successful the default notice must be withdrawn.

Regulation 90Q (appeals: supplementary provisions) applies to appeals under this paragraph.

The surcharge is the sum of the surcharges, calculated in accordance with paragraph (3), in respect of each default relating to the tax year, in which were made the relevant payments to which the specified payment referred to in paragraph (1) relates.

The surcharge in respect of each default is the specified percentage of (A - B)

A surcharge payable under this paragraph is payable 30 days after the issue of the surcharge notice.

Section 102 of the Management Act (mitigation of penalties) applies to a surcharge payable under this paragraph as if it were a penalty.

The Board must issue a surcharge notice to an employer who has been in default on three or more occasions during a surcharge period and consequently will be liable to a surcharge under regulation 90K.

The surcharge notice must show the total surcharge liability for the tax year.

An employer may appeal against a surcharge notice by giving notice to the Board within 30 days of the issue of the surcharge notice.

But paragraph (5)(a) does not apply in respect of a disputed default which has already been the subject of an appeal under regulation 90J, following which the default notice was not withdrawn.

If an e-filing notice has been issued to an employer in respect of a tax year under regulation 206 of the PAYE Regulations (specified employers required to deliver specified information electronically), he must deliver the return required under paragraph 22 of Schedule 4 in relation to that tax year to an official computer system using an approved method of electronic communications.

Sub-paragraph (1) applies regardless of whether any information is due under regulation 73 of the PAYE Regulations (annual return of relevant payments liable to deduction of tax (Forms P35 and P14)).

If the Board have given a direction under Regulation 205(2) of the PAYE Regulations requiring a particular method of electronic communications to be used in the case of an employer, he must use that method.

This regulation does not apply to a return in respect of retrospective earnings where those earnings relate to a tax year which is closed (see paragraph 1(2) of Schedule 4) at the time the relevant retrospective contributions regulations come into force

Specified information delivered by a method of electronic communications must meet the standards of accuracy or completeness set by specific or general directions given by the Board.

Specified information which fails to meet those standards must be treated as not having been delivered.

An employer who fails to deliver specified information or any part of it in accordance with regulation 90N is liable to a penalty.

Table 2 sets out the penalties for employers for the tax years ending 5th April 2005 to 5th April 2009, depending on the number of employees for whom particulars should have been included with the specified information.

Section 103A of the Management Act (interest on penalties) applies to penalties payable under this paragraph.

Where, as respects any year of assessment, a person to whom this regulation applies wishes to be excepted from liability to pay contributions under section 15 of the Act for that year, the following provisions of this regulation shall apply, subject to the provisions of regulations 97 and 98.

Any such person shall make application to the Board for a certificate of exception for that year.

If it is shown to the satisfaction of the Board that the applicant is a person to whom this regulation applies and the application is made before the beginning of the year of assessment to which it relates, the Board shall issue in respect of the applicant such a certificate of exception for that year.

If the application is not made until the beginning of the year of assessment to which it relates, but is made before contributions under that section 15 of the Act for that year become due and payable and it is shown to the satisfaction of the Board that the applicant is a person to whom this regulation applies, the Board may issue in respect of the applicant a certificate of exception for that year.

Where under paragraphs (1) to (4) a certificate of exception has been issued in respect of an applicant for any year of assessment, the Board shall not collect any contributions under section 15 of the Act from the applicant for that year.

This regulation applies to any person who at the beginning of the year of assessment is under the age of 16.

It shall be a condition of exception from liability that the earner makes an application for such an exception to the Board before the beginning of the year of assessment to which the application relates, or before such later date as the Board may allow.

An application under paragraph (2) shall be made in such manner as the Board may direct and, for the purpose of enabling the Board to determine whether the earner is entitled to the exception, the earner shall furnish the Board with such information and evidence as the Board may require, whether the requirement is made at the time of the application or later.

Without prejudice to the earner’s right to any such exception, nothing in paragraphs (1) to (3) shall affect the Board’s powers under regulation 95 to defer, pending the determination of the application, the earner’s liability under section 15 of the Act.

If a person wishes his liability to pay contributions under section 15 of the Act for any year of assessment to be deferred, he shall make an application for that purpose to the Board.

If this paragraph applies, the earner’s liability for Class 4 contributions shall not exceed the maximum found in accordance with paragraph (3).

The maximum is found as follows.

• Step One

  Subtract the lower profits limit from the upper profits limit for the year.

• Step Two

  Multiply the result of Step One by 8 per cent.

• Step Three

  Add to the result of Step Two 53 times the weekly amount of the appropriate Class 2 contribution.

• Step Four

  Subtract from the result of Step Three the aggregate amount of any Class 2 contributions and primary Class 1 contributions paid at the main primary percentage.

  The application of the following steps is determined by reference to the following three Cases.

  • Case 1

    If the result of this step is a positive value, and exceeds the aggregate of—

    1. (a)

       primary Class 1 contributions payable at the main primary percentage,

    2. (b)

       Class 2 contributions; and

    3. (c)

       Class 4 contributions payable at the main Class 4 percentage,

    in respect of the earner’s earnings, profits and gains for the year, the result of this step is the maximum amount of Class 4 contributions payable.

  • Case 2

    If the result of this step is a positive value, but does not exceed the aggregate mentioned in Case 1, the result of this step is the maximum amount of Class 4 contributions payable at the main Class 4 percentage.

  • Case 3

    If the result of this step is a negative value, the maximum amount of a Class 4 contribution payable at the main Class 4 percentage is nil and the result of this step is treated as nil.

    If Case 1 applies, Steps Five to Nine do not, but if Case 2 or Case 3 applies those Steps do apply.

• Step Five

  Multiply the result of Step Four by 100/8

  $\text{<ins class="substitution" data-ukl-changeid="key-f524eeb04fa3d56ce443752a5f920ba2-1502870607579" data-ukl-commentaryref="key-f524eeb04fa3d56ce443752a5f920ba2">Multiply the result of Step Four by</ins>}\genfrac{}{}{0.1ex}{}{\mathrm{<ins\; class="substitution"\; data-ukl-changeid="key-f524eeb04fa3d56ce443752a5f920ba2-1502870607579"\; data-ukl-commentaryref="key-f524eeb04fa3d56ce443752a5f920ba2">100</ins>}}{\mathrm{<ins\; class="substitution"\; data-ukl-changeid="key-f524eeb04fa3d56ce443752a5f920ba2-1502870607579"\; data-ukl-commentaryref="key-f524eeb04fa3d56ce443752a5f920ba2">8</ins>}}$

• Step Six

  Subtract the lower profits limit from the lesser of the upper profits limit and the amount of profits for the year.

• Step Seven

  Subtract the result of Step Five from the result of Step Six.

  If the result of this step is a negative value, it is treated as nil.

• Step Eight

  Multiply the result of Step Seven by 1 per cent.

• Step Nine

  Multiply the amount by which the profits and gains for the year exceed the upper profits limit for the year by 1 per cent.

  The maximum amount of Class 4 contributions payable is—

  1. (a)

     where Case 1 of Step Four applies, the result of that step, and

  2. (b)

     where Case 2 or Case 3 of Step Four applies, the amount produced by adding together the results of Steps Four, Eight and Nine.

  This is subject to the qualifications in paragraphs (4) to (6).

  In this paragraph—

  “lower profits limit” means the lesser of the two monetary sums specified in section 15(3)(a) of the Act; and

  “upper profits limit” means the greater of those sums.

Paragraph (2) is subject to the provisions of section 12 of the Act and to regulations 63 to 65.

Notwithstanding paragraphs (1) to (5), an earner shall be liable, in the first instance, for the full amount of the contributions which would have been payable but for this regulation.

Subject to paragraph (2), any payment such as is specified in regulation 101 shall, except in so far as it is, under that regulation, treated by the Board as made on account of contributions under the Act, be repaid F224to the earner, unless the net amount of such repayment would not exceed in value 50 pence.

If this paragraph applies, the earner shall be liable, in respect of the earnings mentioned in paragraph (1), to pay a Class 4 contribution (referred to in this Part as a “special Class 4 contribution”) F227of an amount equal to the aggregate of—

Any earner to whom regulation 103 applies shall, on request, notify his national insurance number to the person who pays him the earnings referred to in that regulation.

The person who pays those earnings shall record on the earner’s deductions working sheet the earner’s national insurance number, and the appropriate category letter as indicated by the Board.

In this regulation “deductions working sheet” has the same meaning as in Schedule 4.

Where for any year there are payable (or, but for this regulation, there would be payable) by or in respect of an earner a special Class 4 contribution and also any contribution under section 15 of the Act (in this regulation referred to as “an ordinary Class 4 contribution”) or any primary Class 1 contribution or any Class 2 contribution, or any combination of such contributions, the maximum amount of the special Class 4 contribution payable for that year shall not exceed the maximum specified in paragraph (2).

Paragraphs (1) and (2) are without prejudice to the earner’s liability in the first instance for the full amount payable apart from those paragraphs.

Subject to regulation 109 and paragraphs (2) and (3), where any payment has been made by a person as on account of a special Class 4 contribution and that payment has been made in excess of the amount prescribed in regulation 108 or has been made in error, that payment shall be returned by the Board to that person, unless the net amount to be returned does not exceed 50 pence, if application is made to the Board, in writing or in such other form and manner as the Board may allow, within the time specified in paragraph (3).

In calculating the amount of any return of a special Class 4 contribution to be made under paragraph (1) there shall be deducted the amount (if any) treated under regulation 109 as paid on account of other contributions.