The National Insurance Contributions (Application of Part 7 of the Finance Act 2004) (Amendment) Regulations 2017

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the National Insurance Contributions (Application of Part 7 of the Finance Act 2004) Regulations 2012 (S.I. 2012/1868) (“the NICs Disclosure Regulations”) to correspond with changes made to Part 7 of the Finance Act 2004 (c. 12) (“FA 2004”) by virtue of the Finance Act 2015 (c. 11).

Regulation 2 introduces the amendments to the NICs Disclosure Regulations.

Regulation 3 provides a definition of “employer”.

Regulation 4 makes a consequential amendment to Regulation 3 (Structure of the Regulations) to reflect the changes being made.

Regulation 5 updates the table at regulation 5(2) of the NICs Disclosure Regulations to show that new regulations 11C, 16B and 21A to 21D correspond with sections 310C, 313ZC, and 316A to 316D of FA 2004.

Regulation 6 adds new regulation 11C into the NICs Disclosure Regulations and, in particular, requires promoters to notify HMRC within 30 days if the name of a scheme or the name or address of a promoter changes after a reference number has been issued under regulation 12 of those Regulations.

Regulation 7 amends regulation 12(1) of the NICs Disclosure Regulations so as to increase the period within which HMRC may allocate a reference number to notifiable contribution proposals or arrangements from 30 to 90 days.

Regulation 8 introduces a new paragraph (2A) into regulation 14 of the NICs Disclosure Regulations. It requires that where an employer receives, or might reasonably be expected to receive, an advantage from notifiable contribution arrangements or proposed contribution arrangements relating to an employee’s employment, the employer must provide prescribed information to the employee.

Regulation 9 adds a new paragraph (3) to regulation 15 of the NICs Disclosure Regulations as a consequence of the changes introduced in new regulation 16B of those Regulations.

Regulation 10 introduces a new regulation 16B into the NICs Disclosure Regulations. It requires employers to provide HMRC with prescribed information within prescribed times about each employee where the employee or the employer gains an advantage from notifiable contribution arrangements. New regulation 16B(6) enables HMRC to issue a notice under regulation 13(6) or 15(2) of the NICs Disclosure Regulations to exclude the employer from having to comply with the requirements of regulation 16B.

Regulation 11 amends regulation 19 of the NICs Disclosure Regulations. It enables HMRC to require a person suspected of being an introducer in relation to a notifiable contribution proposal to provide prescribed information about those with whom they have made a marketing contact.

Regulation 12 amends regulation 21 of the NICs Disclosure Regulations and inserts regulations 21A to 21D after that regulation.

New regulation 21A enables HMRC to specify additional information which must be provided where a person is required to provide information under regulation 13(2), 14(2) or 14(2A) of the NICs Disclosure Regulations.

New regulation 21B provides that no duty of confidentiality or other restrictions on disclosure would apply to persons who voluntarily provide information or documents to HMRC which they suspect may assist HMRC in determining whether there has been a breach of any of the requirements under the NICs Disclosure Regulations.

New Regulation 21C enables HMRC to publish information about promoters and schemes that are notified under the NICs Disclosure Regulations and which have been issued with a reference number under regulation 12 of those Regulations. HMRC must inform a promoter before publishing any information which would identify that person as a promoter and may not publish any information that will identify scheme users.

New Regulation 21D requires HMRC to publish information about court rulings that are relevant to the earlier publication of information under regulation 21C of the NICs Disclosure Regulations and to publish it in the same manner as the original publication.

Regulation 13 amends regulation 22 of the NICs Disclosure Regulations. It increases the penalties for a person who fails to comply with regulation 15(1) of those Regulations or with regulation 10 of the Tax Avoidance (Information) Regulations 2012 (S.I. 2012/1836) (“the Information Regulations”). The penalties are increased to an amount not exceeding £5,000, £7,500 and £10,000, respectively, for the three categories of failures mentioned in regulation 22(12) of the NICs Disclosure Regulations.

Regulation 14 omits regulation 26(6) of the NICs Disclosure Regulations and amends regulation 26(8) of those Regulations so as to align National Insurance provisions more closely with the tax provisions set out in regulation 13B of the Information Regulations.

A Tax Information and Impact Note covering these Regulations was published on 10 December 2014 and can be found at www.gov.uk/government/publications/disclosure-of-tax-avoidance-schemes. It remains an accurate summary of the impacts that apply to these Regulations.