40D.—(1) This regulation applies to a controller of a sporting testimonial (“C”) who is liable to pay Class 1A contributions in respect of a sporting testimonial payment in accordance with section 10ZBA of the Act.
(2) C must—
(a)on or before making a sporting testimonial payment, deliver to HMRC the information specified in Schedule 4A (real time returns), and
(b)pay the Class 1A contributions to HMRC within the time limit specified in paragraph 10 (monthly payment of contributions by employer) of Schedule 4 (provisions derived from income tax acts and pay as you earn regulations).
(3) Paragraphs 11ZA (payments and recoveries for each tax period by Real Time Information employers: returns), 15 (specified amount of earnings-related contributions payable by the employer), 21E (returns under paragraphs 21A and 21D: amendments), 21EA (returns under paragraphs 21A and 21D), 21G (penalty: failure to comply with paragraph 21A or 21D) and 26 (retention by employer of contribution and election records) of Schedule 4 apply to C with the following modifications—
(a)references to “earnings” are to be read as references to sporting testimonial payments,
(b)references to “the employer” are to be read as references to C, and
(c)references to “earnings related contributions” are to be read as references to any Class 1A contributions that C is liable to pay in respect of sporting testimonial payments.
(4) Paragraphs (2) and (3) do not apply where paragraph (6) applies.
(5) Paragraph (6) applies where—
(a)a sporting testimonial payment is made in a tax year other than the tax year in which the sporting testimonial took place,
(b)in the tax year in which the sporting testimonial payment is made, C is no longer making payments and deductions under the PAYE Regulations, or
(c)a sporting testimonial payment consists of a benefit which is the provision of an asset by or on behalf of C, without transfer of ownership of that asset.
(6) Where this paragraph applies C must report and pay to HMRC any Class 1A contributions due in respect of the sporting testimonial payment referred to in paragraph (5) in accordance with regulations 70 (payment of Class 1A contributions), 71 (due date for payment of a Class 1A contribution) and 74 (employer failing to pay a Class 1A contribution) to 83A (requirement to give security or further security for amounts of Class 1A contributions).
(7) Regulations 55 (repayment of Class 1A contributions) and 77 (payment of interest on a repaid Class 1A contribution) apply to any repayments of Class 1A contributions under this regulation unless the overpayment has been recovered by C under paragraph 11ZA(3) of Schedule 4.
(8) Where a sporting testimonial payment consists of a cash benefit and one or more other benefits, the Class 1A liability is calculated by applying the threshold provided for in section 306B(5) and (6) of ITEPA 2003 against those benefits in the following order—
(a)the cash benefit,
(b)any benefit which consists of an asset where ownership has been transferred by or on behalf of C,
(c)any other benefit which consists of an asset that has been made available for use without any transfer of ownership by or on behalf of C.]
Textual Amendments
F1Reg. 40C - Reg. 40D inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment No. 2) Regulations 2020 (S.I. 2020/300), regs. 1(1), 7