2018 No. 257

Social Security

The Social Security (Contributions) (Amendment No. 2) Regulations 2018

Made

Laid before Parliament

Coming into force in accordance with regulation 1

These Regulations are made by the Treasury in exercise of the powers conferred by sections 3(2), 3(3) and 4(6) of the Social Security Contributions and Benefits Act 19921 and sections 3(2), 3(3) and 4(6) of the Social Security Contributions and Benefits (Northern Ireland) Act 19922 and now exercisable by them.

The Secretary of State and the Department for Communities3 concur in relation to regulation 2.

Citation and commencement1

1

These Regulations may be cited as the Social Security (Contributions) (Amendment No. 2) Regulations 2018 and, subject to paragraph (2), come into force on 6th April 2018.

2

Regulation 2(3) comes into force on 5th April 2019.

Amendment of the Social Security (Contributions) Regulations 20012

1

The Social Security (Contributions) Regulations 20014 are amended as follows.

2

In regulation 225 (amounts to be treated as earnings)—

a

in paragraph (1) for “(13)” substitute “(14)”, and

b

after paragraph (13) insert—

14

The amount specified in this paragraph is the amount of a termination award which is treated as earnings from the employment of the employed earner by virtue of section 402B of ITEPA 20036.

3

In regulation 22B7 (amounts to be treated as earnings: Part 7A of ITEPA 2003)—

a

in paragraph (2) after “Part 7A of ITEPA 2003.” insert “This paragraph is subject to paragraphs (3) and (3A).”,

b

after paragraph (3) insert—

3A

Paragraph (2) does not apply if—

a

the amount would count as employment income by virtue of Part 7A ITEPA 2003 by reason of a relevant step within paragraph 1 of Schedule 11 (employment income provided through third parties: loans etc outstanding on 5 April 2019) to the Finance (No. 2) Act 20178, and

b

the secondary contributor in relation to that amount would have been a person treated as a secondary contributor by virtue of regulation 5(1)9 of, and any of sub-paragraphs (a) to (f) of paragraph 9 of Column (B) of Schedule 3 (employments in respect of which persons are treated as secondary class 1 contributors) to, the Social Security (Categorisation of Earners) Regulations 197810.

c

in paragraph (4) for “paragraph (3)” substitute “paragraphs (3) and (3A)”.

Andrew StephensonRebecca HarrisTwo of the Lords Commissioners of Her Majesty’s Treasury

The Secretary of State concurs as indicated in the preamble.

Signed by authority of the Secretary of State for Work and Pensions

Guy OppermanParliamentary Under-Secretary of StateDepartment for Work and Pensions

The Department for Communities concurs as indicated in the preamble.

Sealed with the Official Seal of the Department for Communities on

seal_r00001Anne McClearyA senior officer of the Department for Communities
EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend regulation 22 of the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) (“the Contributions Regulations”).

Regulation 1 provides for citation and commencement.

Regulation 2(2) inserts new paragraph (14) into regulation 22 of the Contributions Regulations. Paragraph (14) brings the amount of a termination award which is treated as earnings from the employment of the earner by virtue of section 402B Income Tax (Earnings and Pensions) Act 2003 into the definition of earnings contained in section 3 of the Social Security Contributions and Benefits Act 1992.

Regulation 2(3) inserts new paragraph (3A) into regulation 22B of the Contributions Regulations. Paragraph (3A) relieves a host employer, end client, UK agency or UK employer of liability for paying Class 1 primary and secondary National Insurance contributions on payments arising under Schedule 11 to the Finance (No. 2) Act 2017 that would otherwise fall to them as secondary contributors under regulation 5(1) of, and paragraph 9 of Schedule 3 to, the Social Security (Categorisation of Earners) Regulations 1978. This amendment comes into force on 5th April 2019.

A Tax Information and Impact Note covering the changes made by regulation 2(2) was published on 5 December 2016 and is available at: https://www.gov.uk/government/publications/income-tax-and-national-insurance-contributions-treatment-of-termination-payments/income-tax-and-national-insurance-contributions-treatment-of-termination-payments. It remains an accurate summary of the impacts that apply to that regulation.

A Tax Information and Impact Note covering the changes made by regulation 2(3) was published on 22 November 2017 and is available at: https://www.gov.uk/government/publications/disguised-remuneration-further-update/disguised-remuneration-further-update. It remains an accurate summary of the impacts that apply to that regulation.