EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations make an amendment to the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) (“the Contributions Regulations”).
Schedule 3 to the Contributions Regulations provides for certain payments to be disregarded in the calculation of earnings for the purposes of establishing liability to Class 1 National Insurance contributions (NICs).
Regulation 1 provides for citation and commencement.
Regulation 2 makes an amendment to the Contributions Regulations to take into account new tax provisions in the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (ITEPA), inserted by the Finance Act 2020 (c. 14), and changes made by S.I. 2020/922. Regulation 2(2) inserts a new paragraph 13 into Part 7 of Schedule 3 to the Contributions Regulations, so that any bursary payment made by the Education and Skills Funding Agency to a care leaver apprentice, in respect of which no liability to income tax arises by virtue of section 254A of ITEPA and S.I. 2020/922, is also disregarded for the purpose of establishing liability to Class 1 NICs.
A joint Tax Information and Impact Note covering the amendment to tax and NICs policy connected to this instrument was published on 11th March 2020 and is available at https://www.gov.uk/government/publications/income-tax-and-national-insurance-exemptions-for-bursary-payments-to-care-leavers/income-tax-and-national-insurance-exemptions-for-bursary-payments-to-care-leavers. It remains an accurate summary of the impacts that apply to this instrument.