The Social Security (Contributions) Regulations 2001

PART XU.K. MISCELLANEOUS AND SUPPLEMENTAL

Other miscellaneous payments to be disregardedU.K.

1.—(1) The payments listed in [F1this Part] are disregarded in the calculation of earnings.

(2) Paragraph 4 contains additional rules about the way in which the components of a payment by way of expenses incidental to a qualifying absence from home are to be treated for the purpose of earnings-related contributions if the permitted maximum is exceeded.

Textual Amendments

F1Words in Sch. 3 Pt. X para. 1(1) substituted (28.2.2011) by The Social Security (Contributions) (Amendment) Regulations 2011 (S.I. 2011/225), regs. 1, 4(a)

Payments on account of sums already included in the computation of earningsU.K.

2.  A payment on account of a person’s earnings in respect of his employment as an employed earner which comprises, or represents and does not exceed sums which have previously been included in his earnings for the purpose of his assessment of earnings-related contributions.

[F2Payments connected to amounts within regulation 22BU.K.

2A.—(1) A payment (“A”) the subject of which represents, or arises or derives (whether wholly or partly or directly or indirectly) from, an amount (“B”) treated as remuneration under regulation 22B which has previously been included in an employed earner’s earnings for the purposes of assessing earnings-related contributions.

(2) Paragraph (1) does not apply to the extent that A exceeds B.

(3) For the purposes of determining whether paragraph (1) applies, A is to be treated as including the value of any payment made before A which represents, or arises or derives (whether wholly or partly or directly or indirectly) from, B.]

Textual Amendments

Payments discharging liability for secondary Class 1 contributions following election under paragraph 3B of Schedule 1 to the Contributions and Benefits ActU.K.

3.  A payment by way of the discharge of any liability for secondary Class 1 contributions which has been transferred from the secondary contributor to the employed earner by election made jointly by them for the purposes of paragraph 3B(1) of Schedule 1 to the Contributions and Benefits Act (elections about contribution liability in respect of [F3relevant employment income]) F4.

Textual Amendments

F3Words in Sch. 3 para. 3 substituted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Social Security (Contributions) (Amendment No. 4) Regulations 2004 (S.I. 2004/2096), regs. 1(1), 6

F4Paragraph 3B was inserted by section 77(2) of the Child Support, Pensions and Social Security Act 2000 (c. 19).

Payments by way of incidental [F5overnight ] expensesU.K.

4.—[F6(1) A payment by way of incidental overnight expenses, in whatever form, which by virtue of section 240 of ITEPA 2003 are not general earnings liable to income tax under that Act.

(2) If a payment is made by way of incidental overnight expenses in connection with a qualifying period, but the amount of that payment (calculated in accordance with section 241 of ITEPA 2003) exceeds the permitted amount, sub-paragraphs (3) to (6) apply.]

(3) So much of the payment as is made by way of cash shall be included in the calculation of earnings.

(4) The amount of cash for which a cash voucher can be exchanged shall be included in the calculation of earnings.

(5) The cost of provision of any non-cash voucher shall be included in the calculation of earnings and anything for which the voucher can be exchanged shall be disregarded in that calculation.

(6) Any payment by way of a benefit in kind shall be disregarded in the calculation of earnings.

[F7(7) In this paragraph—

  • “the cost of provision” in relation to a non-cash voucher is the cost incurred by the person at whose expense the voucher is provided;

  • “the permitted amount” has the meaning given in section 241(3) of ITEPA 2003; and

  • “qualifying period” has the meaning given in section 240(1)(b) and (4) of ITEPA 2003.]

Textual Amendments

F5Words in Sch. 3 Pt. 10 para. 4 heading substituted (6.4.2004) by The Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004 (S.I. 2004/770), regs. 1(1), 28(7)(a)(i)

Gratuities and offeringsU.K.

5.—(1) A payment of, or in respect of, a gratuity or offering [F8which—

(a)satisfies the condition in either sub-paragraph (2) or (3); and

(b)is not within sub-paragraph (4) or (5).]

(2) [F9The condition in this sub-paragraph] is that the payment—

(a)is not made, directly or indirectly, by the secondary contributor; and

(b)does not comprise or represent sums previously paid to the secondary contributor.

(3) [F10The condition in this sub-paragraph] is that the secondary contributor does not allocate the payment, directly or indirectly, to the earner.

[F11(4) A payment made to the earner by a person who is connected with the secondary contributor is within this sub-paragraph unless—

(a)it is—

(i)made in recognition for personal services rendered to the connected person by the earner or by another earner employed by the same secondary contributor; and

(ii)similar in amount to that which might reasonably be expected to be paid by a person who is not so connected; or

(b)the person making the payment does so in his capacity as a tronc-master.

(5) A payment made to the earner is within this sub-paragraph if it is made by a trustee holding property for any persons who include, or any class of persons which includes, the earner.

In this sub-paragraph “trustee” does not include a tronc-master.

(6) A person is connected with the secondary contributor for the purposes of this paragraph if his relationship with the secondary contributor, or where the employer and secondary contributor are different, with either of them, is as described in subsection (2), (3), (4), (5), (6) or (7) of section 839 of the Taxes Act (connected persons).]

Textual Amendments

F8Words in Sch. 3 Pt. 10 para. 5(1) substituted (23.2.2004) by The Social Security (Contributions) (Amendment) Regulations 2004 (S.I. 2004/173), regs. 1, 2(2)

F9Words in Sch. 3 Pt. 10 para. 5(2) substituted (23.2.2004) by The Social Security (Contributions) (Amendment) Regulations 2004 (S.I. 2004/173), regs. 1, 2(3)

F10Words in Sch. 3 Pt. 10 para. 5(3) substituted (23.2.2004) by The Social Security (Contributions) (Amendment) Regulations 2004 (S.I. 2004/173), regs. 1, 2(4)

Redundancy paymentsU.K.

6.  For the avoidance of doubt, in calculating the earnings paid to or for the benefit of an earner in respect of an employed earner’s employment, any payment by way of a redundancy payment shall be disregarded.

Sickness payments attributable to contributions made by employed earnerU.K.

7.  If the funds for making a sickness payment under arrangements of the kind mentioned in section 4(1)(b) of the Contributions and Benefits Act are attributable in part to contributions to those funds made by the employed earner, for the purposes of section 4(1) of that Act the part of that payment which is attributable to those contributions shall be disregarded.

[F12Expenses and other payments not charged to income tax under miscellaneous exemptionsU.K.

8.   A payment which is not charged to tax under any of the following provisions of ITEPA 2003—

(a)section 245 (travelling and subsistence during public transport strikes);

(b)section 246 (transport between work and home for disabled employees: general);

(c)section 248 (transport home: late night working and failure of car-sharing arrangements);

(d)section 290A (accommodation outgoings of ministers of religion);

(e)section 290B (allowances paid to ministers of religion in respect of accommodation outgoings);

(f)section 321 (suggestion awards).]

Textual Amendments

VAT on the supply of goods and services by employed earnerU.K.

9.  If—

(a)goods or services are supplied by an earner in employed earner’s employment;

(b)earnings paid to or for the benefit of the earner in respect of that employment include the remuneration for the supply of those goods or services; and

(c)value added tax is chargeable on that supply;

an amount equal to the value added tax chargeable on that supply shall be excluded from the calculation of those earnings.

[F13Employee’s liabilities and indemnity insurance]U.K.

10.  [F13 A payment which by virtue of section 346 of ITEPA 2003 (deduction for employee liabilities) is deductible from the general earnings of the employment chargeable to tax under that Act.]

[F14This paragraph is subject to paragraph 1A of Part 8 of this Schedule.]

Textual Amendments

Fees and subscriptions to professional bodies, learned societies etcU.K.

11.  A payment of, or a contribution towards any fee, contribution or annual subscription which, under section 201(1) of the Taxes Act (fees and subscriptions to professional bodies, learned societies etc) is deductible from the emoluments of any office or employment. [F15This paragraph is subject to paragraph 1A of Part 8 of this Schedule.]

Textual Amendments

Holiday payU.K.

12.  [F16A payment in respect of a period of holiday entitlement where—

(a)the sum paid is derived directly or indirectly from a fund—

(i)to which more than one secondary contributor contributes, and

(ii)the management and control of which are not vested in those secondary contributors; or

(b)the person making the payment is entitled to be reimbursed from such a fund.]

Textual Amendments

Payments to ministers of religionU.K.

13.  A payment of a fee in respect of employment as a minister of religion which does not form part of the stipend or salary paid in respect of that employment.

[F17 Payments to miners and former miners, etc. in lieu of coalU.K.

14.—(1) A payment in lieu of the provision of coal or smokeless fuel, if the employee is—

(a)a colliery worker;

(b)a former colliery worker;

and the condition in sub-paragraph (2) is met.

(2) The condition is that the amount of coal or fuel in respect of which the payment is made does not substantially exceed the amount reasonably required for personal use.

(3) That condition is assumed to be met unless the contrary is shown.

(4) In this pans a coragraph, “colliery worker” meaal miner or any other person employed at or about a colliery otherwise than in clerical, administrative or technical work; and “former colliery worker” shall be construed accordingly.

(5) This paragraph does not apply to Northern Ireland.]

Here “miner” means any person employed in or about a colliery, whether on the surface or below ground, except a person employed—

(a)in a clerical, technical or administrative capacity; or

(b)at a coke oven, brick works or other activity not ancillary to coal mining.

(2) This paragraph does not apply to Northern Ireland.

Textual Amendments

[F18Rewards for assistance with lost or stolen cardsU.K.

15.—(1) A payment made by an issuer of charge cards, cheque guarantee cards, credit cards or debit cards, as a reward to an individual who assists in identifying or recovering lost or stolen cards in the course of his or her employment as an employed earner (other than employment by the issuer), together with any income tax paid by the issuer for the purpose of discharging any liability of the individual to income tax on the payment.

(2) In this paragraph—

“charge card” means a credit card, the terms of which include the obligations to settle the account in full at the end of a specified period;

“cheque guarantee card” means a card issued by a bank or building society for the purpose of guaranteeing a payment or supporting the encashment of a cheque up to a specified value;

“credit card” means a card which—

(a)

may be used on its own to pay for goods or services or to withdraw cash, and

(b)

enables the holder to make purchases and to draw cash up to a prearranged limit; and

“debit card” means a card linked to a bank or building society current account, used to pay for goods or services by debiting the holder’s account.]

Textual Amendments

[F19Student loansU.K.

16.—(1) A payment made in accordance with Regulations made under section 186 of the Education Act 2002 in respect of the repayment, reduction or extinguishing of the amounts payable in respect of a loan.

(2) A payment for the purpose of discharging any liability of the earner to income tax for any tax year where the income tax in question is tax chargeable in respect of—

(a)the payment referred to in paragraph (1), or

(b)the payment made for the purpose of discharging the income tax liability itself.]

Textual Amendments

[F20Payment of PAYE tax in respect of notional paymentU.K.

17.  A payment by way of income tax for which the employer is required to account to the Board under section 710(1) of ITEPA 2003 (notional payments: accounting for tax).]

Textual Amendments

[F21Payments made from the In-Work Emergency Discretion FundU.K.

18.  Any In-Work Emergency Discretion Fund payment made to a person pursuant to arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973.

This paragraph does not apply in Northern Ireland.

Textual Amendments

Payments made from the In-Work Emergency FundU.K.

19.  Any In-Work Emergency Fund payment made to a person pursuant to arrangements made by the Department of Economic Development under section 1 of the Employment and Training Act (Northern Ireland) 1950.

This paragraph applies only in Northern Ireland.]

Textual Amendments

[F22Up-Front Childcare Fund paymentsU.K.

20.  Any Up-Front Childcare Fund payment made pursuant to arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973.

This paragraph does not apply to Northern Ireland.]

Textual Amendments

[F23Better off in Work Credit paymentsU.K.

21.  Any Better off in Work Credit payment made pursuant to arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973.

This paragraph does not apply to Northern Ireland.]

Textual Amendments

[F24Fees relating to the Protection of Vulnerable Groups (Scotland) SchemeU.K.

22.  A payment of a fee in respect of an application to join the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007 (scheme to collate and disclose information about individuals working with vulnerable persons).]

Textual Amendments

[F25Fees relating to the Disclosure and Barring ServiceU.K.

23.—(1) A fee paid by virtue of section 116A(4)(b) or (5)(b) of the Police Act 1997 (“the Police Act”) (fee for up-dating certificates).

(2) A fee paid under—

(a)section 113A(1)(b) of the Police Act (fee for criminal record certificates);

(b)section 113B(1)(b) of the Police Act (fee for enhanced criminal record certificates);

(c)section 114(1)(b) of the Police Act (fee for criminal record certificates: Crown employment); or

(d)section 116(1)(b) of the Police Act (fee for enhanced criminal record certificates: judicial appointments and Crown employment);

where the application is made at the same time as an application under section 116A(4) or (5) of the Police Act for the certificate to be subject to up-date arrangements.]

Textual Amendments

[F26Advice relating to proposed employee shareholder agreementsU.K.

24.—(1) A payment, or reimbursement, in accordance with section 205A(7) of the Employment Rights Act 1996 (employee shareholder status), of any reasonable costs in obtaining relevant advice.

(2) “Relevant advice” has the same meaning as section 326B(2) of ITEPA 2003 (advice relating to proposed employee shareholder agreements).]

Textual Amendments

[F27Payments on which Class 1 or Class 1A contributions have been paid pursuant to the Social Security Contributions (Limited Liability Partnership) Regulations 2014U.K.

25.  A payment made by an employer to an employed earner which represents an amount on which Class 1 or Class 1A contributions are payable by a limited liability partnership in respect of that earner by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014.]

Textual Amendments

[F28Post Office Horizon compensation paymentsU.K.

26.—(1) A payment of compensation made by Post Office Limited to a person in respect of a historic conviction that was quashed because it involved evidence from the Horizon system.

(2) A payment of compensation made by the Department for Business and Trade to a person who was a party to a claim against Post Office Limited in respect of the Horizon system that was subject to a group litigation order.

(3) In this paragraph—

“the Horizon system” means any version of the computer system used by Post Office Limited known as Horizon, Horizon Legacy, Horizon Online or HNG-X;

“Post Office Limited” means the private company limited by shares incorporated and registered in England and Wales with company number 02154540.]

Textual Amendments

[F29Post Office Horizon Shortfall Scheme compensation paymentsU.K.

27.—(1) A top-up payment made by Post Office Limited to a recipient of a compensation payment from the Horizon Shortfall Scheme for the purpose of topping-up that compensation payment to account for sums lost to tax.

(2) In this paragraph—

“Horizon Shortfall Scheme” means the compensation scheme created on 1st May 2020 by Post Office Limited to compensate people who were adversely affected by accounting shortfalls related to the Horizon system;

“the Horizon System” and “Post Office Limited” have the same meaning as in paragraph 26(3).]

Textual Amendments

[F30Group Litigation Order nominated individual compensation payments, onward payments of Post Office compensation payments, Post Office Process Review Scheme compensation payments and Suspension Remuneration Review compensation payments U.K.

28.—(1) A payment made by the Department for Business and Trade to a nominated individual under the Group Litigation Order compensation scheme.

(2) A payment that is a relevant onward payment of a—

(a)Group Litigation Order compensation scheme payment,

(b)Horizon Shortfall Scheme top-up payment made to a recipient of a compensation payment from the Horizon Shortfall Scheme for the purpose of topping-up that compensation payment to account for sums lost to tax,

(c)Suspension Remuneration Review compensation payment, or

(d)Post Office Process Review Scheme compensation payment.

(3) A payment made by Post Office Limited under the Post Office Process Review Scheme.

(4) A payment (including any top-up payment) made by Post Office Limited under the Suspension Remuneration Review.

(5) In this paragraph—

“Group Litigation Order compensation scheme” means the scheme announced by His Majesty’s Government on 22 March 2022 with the objective of ensuring that persons who were party to a claim against Post Office Limited in respect of the Horizon system that was subject to a group litigation order have access to compensation for losses related to that system;

“Horizon Shortfall Scheme” has the same meaning as in paragraph 27(2);

“the Horizon system” has the same meaning as in paragraph 26(3);

“nominated individual” means any person who was a shareholder or a director of a company or a partner in a partnership which ceased to exist and was a party to a claim against Post Office Limited in respect of the Horizon system that was subject to a group litigation order;

“Post Office Limited” has the same meaning as in paragraph 26(3);

“Post Office Process Review Scheme” means the review established by Post Office Limited to provide redress to postmasters who were financially impacted by previous processes or policies in relation to balance discrepancies unrelated to the Horizon system;

“relevant onward payment” means a payment made by a company who receives a compensation payment, to an individual who is or was a director or employee of the company and it is reasonable to conclude from the circumstances that the payment is made by the company to the individual for the purpose of passing on all or part of the compensation payment to the individual;

“Suspension Remuneration Review” means the review established by Post Office Limited to provide redress to postmasters contracted to deliver Post Office services through branches who were suspended before March 2019 and did not receive remuneration during their period of suspension.]

Textual Amendments

[F31Parental Transitions Support scheme paymentsU.K.

29.  Any Parental Transitions Support scheme payment made by a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 under section 20 of the Local Government in Scotland Act 2003.

Textual Amendments

Jobs Plus Pilot paymentsU.K.

30.  Any Jobs Plus Pilot scheme payment made pursuant to arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973.]

Textual Amendments