The Social Security (Contributions) (Amendment No. 2) Regulations 2005

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004: “the 2001 Regulations”). The effect is to secure parity of treatment, for income tax and national insurance purposes, of payments made by employers secondary contributors to employees in respect of the employees' attendance for long-term training at recognised educational establishments. Such payments are not subjected to income tax by virtue of Inland Revenue Statement of Practice 4/86, a revised version which was published on 16th March 2005.

Regulation 1 provides for the citation, commencement and effect of the Regulations.

Regulation 2 introduces the amendments to the 2001 Regulations.

Regulation 3 makes an amendment to regulation 40 of the 2001 Regulations to ensure that the sums which are disregarded in computing the liability to Class 1 National Insurance Contributions by virtue of the amendment made by regulation 4 are also disregarded in computing the secondary contributor’s liability for Class 1A contributions.

Regulation 4 amends Part 7 of Schedule 3 to the 2001 Regulations adding a new paragraph 12, which corresponds, as nearly as possible, to the revised provisions of the Statement of Practice.

These Regulations do not impose new costs on business.