The Social Security (Contributions) (Amendment No. 6) Regulations 2014

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) (“SSCR 2001”). Schedule 3 to SSCR 2001 deals with payments which are to be disregarded in the calculation of earnings for the purposes of earnings-related contributions.

Regulation 3 inserts new disregards into Part 5 and Part 8 of Schedule 3 to SSCR 2001. The new disregards refer to the exemption from income tax provided by section 320C of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (“ITEPA 2003”).

The effect is that when an employer meets the cost of an employee’s recommended medical treatment in the form of a non-cash voucher, expenses payment or reimbursement, then that payment or payment in kind will be disregarded in the calculation of the employee’s earnings for liability for Class 1 National Insurance contributions.

The disregard will apply to a recommendation for medical treatment which meets the conditions set out in sections 320C(3)(a) and (b) of ITEPA 2003 and any requirements specified in regulations made under section 320C(3)(c) of ITEPA 2003, up to an annual cap of £500 per employee.

A Tax Information and Impact Note covering this instrument was published on 10th December 2013 alongside the Finance Bill 2014 and is available on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm. It remains an accurate summary of the impacts that apply to this instrument.