The Social Security (Contributions) Regulations 2001

Prescribed emoluments in respect of which Class 1A contributions not payable U.K.

40.—(1) Class 1A contributions shall not be payable in respect of the emoluments prescribed by paragraphs (2) to (7).

(2) The emoluments prescribed by this paragraph are emoluments which are excluded from the calculation of a person’s earnings in respect of any employed earner’s employment by virtue of the following provisions of Schedule 3—

[F1 (za) in Part V, paragraph 6A;]

(a) in Part VI, paragraphs 4 to 7;

(b) in Part VIII, paragraphs 4, 5 and 13;

(c) in Part IX, paragraphs 2 to 7; and

(d) in Part X, paragraphs 5, [F2 9, 11 to 13 and 15] .

(3) The emoluments prescribed by this paragraph are emoluments which are payments which are not excluded from the calculation of a person’s earnings in respect of any employed earner’s employment by virtue of paragraph 1 of Part II of Schedule 3 (payments in kind), but which are so excluded by virtue of paragraph 3 of Part VIII of Schedule 3 (qualifying travelling expenses) or paragraph 9 of that Part (specific and distinct expenses).

(4) The emoluments prescribed by this paragraph are emoluments which—

(a) are excluded from the calculation of a person’s earnings in respect of any employed earner’s employment by virtue of paragraph 2(2)(b) of Part VIII of Schedule 3 (relocation expenses where the relevant change occurred before 6th April 1998); and

(b) are not paid in respect of eligible removal expenses within the meaning of Part III of Schedule 11A to the Taxes Act F3 .

(5) The emoluments prescribed by this paragraph are emoluments which consist in the provision, or are provided in connection with all or part of the costs and expenses, of child care (but not school fees) incurred by an employed earner in respect of a child not exceeding the age of 16 years for whom he has parental responsibility.

(6) The emoluments prescribed by this paragraph are emoluments by way of any benefit pursuant to—

(a) a retirement benefits scheme which falls within section 596(1) of the Taxes Act (retirement benefits schemes: exceptions from section 595) F4 or to which section 596(2) of that Act applies;

(b) a pilots’ benefit fund under section 607 of the Taxes Act F5 ;

(c) a fund to which section 608 of the Taxes Act (superannuation funds approved before 6th April 1980) applies.

(7) The emoluments prescribed by this paragraph are so much of any emoluments as are not charged to income tax under Schedule E by virtue of any of the following extra-statutory concessions published by the Board as at 1st September 2000—

F6 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) A6 (miners: free coal and allowances in lieu);

(c) A11 (residence in the United Kingdom: year of commencement or cessation of residence);

(d) A22 (long service awards);

(e) A37 (tax treatment of directors’ fees received by partnerships and other companies);

(f) A56 (benefits in kind: tax treatment of accommodation in Scotland provided for employees);

(g) A57 (staff suggestion schemes);

(h) A58 (travelling and subsistence allowances when public transport disrupted);

(i) A59 (disabled persons’ home to work travel);

(j) A65 (workers on offshore oil and gas rigs or platforms: free transfers from or to mainland);

(k) A66 (employees’ journeys home: late night travel and breakdown in car sharing arrangements);

(l) A70 (small gifts to employees by third parties and staff Christmas parties);

(m) A72 (pension schemes and accident insurance policies);

(n) A74 (meals provided by employers);

(o) A85 (transfers of assets by employees and directors to employees and others);

(p) A91 (living accommodation provided by reason of employment);

(q) A97 (Jobmatch programme).

Sub-paragraphs (b) and (q) do not apply to Northern Ireland and sub-paragraph (f) applies only to Scotland.

(8) In this regulation—

• “child care” includes—

  (a)

  care provided in accordance with the provisions of Part X of the Children Act 1989 F7 (child-minding and day care for young children);

  (b)

  in the case of a child aged 8 or over, care provided by a child minder;

  (c)

  in the case of a child under the age of 8, care provided by a child minder where that care does not exceed, in total, two hours in any day;

  (d)

  care provided by a relative or a nanny;

  (e)

  care provided during out-of-school hours and during school holidays;

  (f)

  full-time and part-time care;

• “emolument” means an amount which for the purposes of the Income Tax Act is, or falls to be treated as, an emolument received by an earner from any employment;

• “nanny” and “relative” have the meanings respectively given to them in sections 71(13) and 105(1) of the Children Act 1989.

(9) In its application to Northern Ireland, paragraph (8) has effect with the substitution—

(a) in sub-paragraph (b) of “ aged 12 or over ” for “aged 8 or over”; and

(b) in sub-paragraph (c) of “ the age of 12 ” for the “the age of 8”.

Textual Amendments

F1 Reg. 40(2)(za) inserted (26.7.2001) by The Social Security (Contributions) (Amendment No. 5) Regulations 2001 (S.I. 2001/2412), regs. 1, 3(2)(a)

F2 Words in reg. 40(2)(d) substituted (26.7.2001) by The Social Security (Contributions) (Amendment No. 5) Regulations 2001 (S.I. 2001/2412), regs. 1, 3(2)(b)

F3 Schedule 11A was inserted by paragraph 2 of Schedule 5 to the Finance Act 1993 (c. 34).

F4 Section 596(1)(b) was amended by paragraph (8)(2)(b) of Schedule 6 to the Finance Act 1989 (c. 26).

F5 Section 607 was amended by section 104(2) of the Finance Act 1994 (c. 9).

F6 Reg. 40(7)(a) omitted (26.7.2001) by virtue of The Social Security (Contributions) (Amendment No. 5) Regulations 2001 (S.I. 2001/2412), regs. 1, 3(3)

F7 1989 c. 41.