Citation, commencement, interpretation and extent1
1
This Order may be cited as the Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order 2006 and shall come into force on 6th April 2007.
2
In this Order—
“the 1993 Act” means the Pension Schemes Act 1993;
“the Northern Ireland Act” means the Pension Schemes (Northern Ireland) Act 1993;
“the low earnings threshold”, in relation to a tax year, means the low earnings threshold for that tax year as specified in—
“qualifying earnings factor”, in relation to a tax year, has the same meaning as in—
- a
section 122(1) of the Social Security Contributions and Benefits Act 1992 (interpretation); or
- b
in relation to Northern Ireland, section 121(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (interpretation);
- a
“the upper earnings threshold” means 3LET minus 2QEF, where—
- a
3LET means the amount produced by multiplying the low earnings threshold by 3; and
- b
2QEF means the amount produced by doubling the qualifying earnings factor and rounding the resulting figure to the nearest whole £100 (taking any amount of £50 as nearest to the previous whole £100);
- a
“relevant tax year” means any of the following tax years—
- a
2007-2008;
- b
2008-2009;
- c
2009-2010;
- d
2010-2011;
- e
2011-2012.
- a
3
These provisions of this Order extend to England and Wales and Scotland—
a
articles 2 to 4;
b
this article, and the Schedules, so far as they relate to articles 2 to 4.
4
These provisions of this Order extend to Northern Ireland—
a
articles 5 to 7;
b
this article, and the Schedules, so far as they relate to articles 5 to 7.
Alteration of reduced rates of secondary Class 1 contributions for salary related contracted-out schemes2
In section 41(1B) of the 1993 Act (reduced rates of secondary Class 1 contributions in contracted-out employment) for “3.5 per cent” substitute “3.7 per cent”.
Reduced rates of Class 1 contributions and rebates for money purchase contracted-out schemes3
1
This article applies for the purposes of section 42A of the 1993 Act (reduced rates of Class 1 contributions, and rebates).
2
For the purposes of section 42A(2) of the 1993 Act (reduction of primary Class 1 contributions), the appropriate flat-rate percentage for each of the relevant tax years is 1.6 per cent.
3
For the purposes of section 42A(2A) of the 1993 Act (reduction of secondary Class 1 contributions), the appropriate flat-rate percentage for each of the relevant tax years is 1.4 per cent.
4
For the purposes of section 42A(3) of the 1993 Act (appropriate age-related percentage), the appropriate age-related percentage in respect of an earner for a relevant tax year is the percentage given in the table in Schedule 1 by reference to—
a
that tax year, and
b
the age of the earner on the day immediately before the start of that tax year.
Appropriate age-related percentages for appropriate personal pension schemes4
1
This article applies for the purposes of section 45(1) of the 1993 Act (amount of minimum contributions).
2
For a relevant tax year, the appropriate age-related percentage in respect of earnings of an earner is determined in accordance with paragraph (3), (4) or (5).
3
If the earnings do not exceed the low earnings threshold, the appropriate age-related percentage is the column B percentage.
4
If the earnings exceed the low earnings threshold, but do not exceed the upper earnings threshold, then—
a
in respect of the part of the earnings that does not exceed the low earnings threshold, the appropriate age-related percentage is the column B percentage;
b
in respect of the part of the earnings that exceeds the low earnings threshold, the appropriate age-related percentage is the column C percentage.
5
If the earnings exceed the low earnings threshold and the upper earnings threshold, then—
a
in respect of the part of the earnings that does not exceed the low earnings threshold, the appropriate age-related percentage is the column B percentage;
b
in respect of the part of the earnings that exceeds the low earnings threshold but does not exceed the upper earnings threshold, the appropriate age-related percentage is the column C percentage; and
c
in respect of the part of the earnings that exceeds the upper earnings threshold, the appropriate age-related percentage is the column D percentage.
6
For a relevant tax year, in respect of earnings of an earner—
a
the column B percentage is the percentage given in column B of the appropriate table by reference to the age of the earner on the day immediately before the start of that tax year;
b
the column C percentage is the percentage given in column C of the appropriate table by reference to the age of the earner on the day immediately before the start of that tax year;
c
the column D percentage is the percentage given in column D of the appropriate table by reference to the age of the earner on the day immediately before the start of that tax year.
7
The appropriate table is the table in—
a
Schedule 2, if the relevant tax year is 2007-2008;
b
Schedule 3, if the relevant tax year is 2008-2009;
c
Schedule 4, if the relevant tax year is 2009-2010;
d
Schedule 5, if the relevant tax year is 2010-2011;
e
Schedule 6, if the relevant tax year is 2011-2012.
Alteration of reduced rates of secondary Class 1 contributions for salary related contracted-out schemes5
In section 37(1B) of the Northern Ireland Act9 (reduced rates of secondary Class 1 contributions) for “3.5 per cent” substitute “3.7 per cent”.
Reduced rates of Class 1 contributions and rebates for money purchase contracted-out schemes6
1
This article applies for the purposes of section 38A of the Northern Ireland Act10 (reduced rates of Class 1 contributions, and rebates in contracted-out employment).
2
For the purposes of section 38A(2) of the Northern Ireland Act (reduction of primary Class 1 contributions), the appropriate flat-rate percentage for each of the relevant tax years is 1.6 per cent.
3
For the purposes of section 38A(2A) of the Northern Ireland Act (reduction of secondary Class 1 contributions), the appropriate flat-rate percentage for each of the relevant tax years is 1.4 per cent.
4
For the purposes of section 38A(3) of the Northern Ireland Act (appropriate age-related percentage), the appropriate age-related percentage in respect of an earner for a relevant tax year is the percentage given in the table in Schedule 1 by reference to—
a
that tax year, and
b
the age of the earner on the day immediately before the start of that tax year.
Appropriate age-related percentages for appropriate personal pension schemes7
1
This article applies for the purposes of section 41(1) of the Northern Ireland Act11 (amount of minimum contributions).
2
For a relevant tax year, the appropriate age-related percentage in respect of earnings of an earner is determined in accordance with paragraph (3), (4) or (5).
3
If the earnings do not exceed the low earnings threshold, the appropriate age-related percentage is the column B percentage;
4
If the earnings exceed the low earnings threshold, but do not exceed the upper earnings threshold, then—
a
in respect of the part of the earnings that does not exceed the low earnings threshold, the appropriate age-related percentage is the column B percentage;
b
in respect of the part of the earnings that exceeds the low earnings threshold, the appropriate age-related percentage is the column C percentage.
5
If the earnings exceed the low earnings threshold and the upper earnings threshold, then—
a
in respect of the part of the earnings that does not exceed the low earnings threshold, the appropriate age-related percentage is the column B percentage;
b
in respect of the part of the earnings that exceeds the low earnings threshold but does not exceed the upper earnings threshold, the appropriate age-related percentage is the column C percentage; and
c
in respect of the part of the earnings that exceeds the upper earnings threshold, the appropriate age-related percentage is the column D percentage.
6
For a relevant tax year, in respect of earnings of an earner—
a
the column B percentage is the percentage given in column B of the appropriate table by reference to the age of the earner on the day immediately before the start of that tax year;
b
the column C percentage is the percentage given in column C of the appropriate table by reference to the age of the earner on the day immediately before the start of that tax year;
c
the column D percentage is the percentage given in column D of the appropriate table by reference to the age of the earner on the day immediately before the start of that tax year.
7
The appropriate table is the table in—
a
Schedule 2, if the relevant tax year is 2007-2008;
b
Schedule 3, if the relevant tax year is 2008-2009;
c
Schedule 4, if the relevant tax year is 2009-2010;
d
Schedule 5, if the relevant tax year is 2010-2011;
e
Schedule 6, if the relevant tax year is 2011-2012.
Signed by authority of the Secretary of State for Work and Pensions.