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The Social Security (Contributions) Regulations 2001

Status:

This is the original version (as it was originally made).

  1. Introductory Text

  2. PART 1 GENERAL

    1. 1.Citation, commencement and interpretation

  3. PART 2 ASSESSMENT OF EARNINGS RELATED CONTRIBUTIONS

    1. 2.Earnings periods

    2. 3.Earnings period for earnings normally paid or treated as paid at regular intervals

    3. 4.Earnings period for earnings normally paid otherwise than at regular intervals and not treated as paid at regular intervals

    4. 5.Earnings period for sums deemed to be earnings by virtue of regulations made under section 112 of the Act

    5. 6.Earnings period for earnings to be aggregated where the earnings periods for those earnings otherwise would be of different lengths

    6. 7.Treatment of earnings paid otherwise than at regular intervals

    7. 8.Earnings periods for directors

    8. 9.Earnings period for statutory maternity pay and statutory sick pay paid by the Board

    9. 10.Earnings limits and thresholds

    10. 11.Prescribed equivalents

    11. 12.Calculation of earnings-related contributions

    12. 13.General provisions as to aggregation

    13. 14.Aggregation of earnings paid in respect of separate employed earner’s employments under the same employer

    14. 15.Aggregation of earnings paid in respect of different employed earner’s employments by different persons and apportionment of contribution liability

    15. 16.Aggregation of earnings paid after pensionable age

    16. 17.Apportionment of single payment of earnings in respect of different employed earner’s employments by different secondary contributors

    17. 18.Change of earnings period

    18. 19.Holiday payments

    19. 20.Joint employment of husband and wife

    20. 21.Annual maximum

    21. 22.Payment to be treated as earnings

    22. 23.Manner of making sickness payments treated as remuneration

    23. 24.Calculation of earnings for the purposes of earnings-related contributions

    24. 25.Payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions

    25. 26.Certain payments by trustees to be disregarded

    26. 27.Payments to directors which are to be disregarded

    27. 28.Liability for Class 1 contributions in respect of earnings normally paid after pensionable age

    28. 29.Liability for Class 1 contributions of persons over pensionable age

    29. 30.Abnormal pay practices

    30. 31.Practices avoiding or reducing liability

  4. PART 3 CLASS 1A CONTRIBUTIONS

    1. 32.Interpretation for the purposes of this Part

    2. 33.Exception from liability to pay Class 1A contributions in respect of cars made available to members of an employed earner’s family or household in certain circumstances

    3. 34.Class 1A contributions payable where two or more cars are made available concurrently

    4. 35.Reduction of certain Class 1A contributions in the case of a car provided or made available by reason of two or more employments or to two or more employed earners

    5. 36.Reduction of certain Class 1A contributions on account of the number of employments in the cases of something provided or made available by reason of two or more employments and of something provided or made available to two or more employed earners

    6. 37.Reduction of certain Class 1A contributions in respect of cars made available to disabled employed earners

    7. 38.Exception from liability to pay Class 1 contributions in respect of cars made available to disabled employed earners only for business and home to work travel

    8. 39.Calculation of Class 1A contributions

    9. 40.Prescribed emoluments in respect of which Class 1A contributions not payable

  5. PART 4 CLASS 1B CONTRIBUTIONS

    1. 41.Calculation of Class 1B contributions

    2. 42.Exception from liability to pay Class 1B contributions

  6. PART 5 EXCEPTION FROM LIABILITY FOR CLASS 2 CONTRIBUTIONS, PROVISIONS ABOUT CLASS 3 CONTRIBUTIONS, AND REALLOCATION AND REFUND OF CONTRIBUTIONS (OTHER THAN CLASS 4)

    1. 43.Exception from liability for Class 2 contributions

    2. 44.Application for, and duration and cancellation of, certificates of exception

    3. 45.Earnings for the purposes of certificates of exception

    4. 46.Certificates of exception—exception from liability for, and entitlement to pay, Class 2 contributions

    5. 47.Return of Class 2 contributions paid by low earners

    6. 48.Class 3 contributions

    7. 49.Precluded Class 3 contributions

    8. 50.Class 3 contributions not paid within prescribed periods

    9. 51.Disposal of contributions not properly paid

    10. 52.Return of contributions

    11. 53.Return of contributions: further provisions

    12. 54.Return of Class 1 contributions paid at the non-contracted-out rate instead of at the contracted-out rate

    13. 55.Repayment of Class 1A contributions

    14. 56.Return of precluded Class 3 contributions

    15. 57.Calculation of return of contributions

    16. 58.Reallocation of contributions for benefit purposes

    17. 59.Circumstances in which two-year limit for refunds of Class 1, 1A or 1B contributions not to apply

  7. PART 6 LATE PAID AND UNPAID CONTRIBUTIONS (OTHER THAN CLASS 4 CONTRIBUTIONS)

    1. 60.Treatment for the purpose of contributory benefit of unpaid primary Class 1 contributions where no consent, connivance or negligence on the part of the primary contributor

    2. 61.Voluntary Class 2 contributions not paid within permitted period

    3. 62.Payment of contributions after death of contributor

    4. 63.Class 2 contributions paid late in accordance with a payment undertaking

    5. 64.Class 2 and Class 3 contributions paid within a month from notification of amount of arrears

    6. 65.Class 2 and Class 3 contributions paid late through ignorance or error

  8. PART 7 COLLECTION OF CONTRIBUTIONS (OTHER THAN CLASS 4 CONTRIBUTIONS) AND RELATED MATTERS

    1. 66.Notification of national insurance numbers to secondary contributors

    2. 67.Collection and recovery of earnings-related contributions, and Class 1B contributions

    3. 68.Other methods of collection and recovery of earnings-related contributions

    4. 69.Transfer of liability from secondary contributor to employed earner: share option gains

    5. 70.Payment of Class 1A contributions

    6. 71.Due date for payment of a Class 1A contribution

    7. 72.Provisions relating to a Class 1A contribution due on succession to business

    8. 73.Provisions relating to a Class 1A contribution due on cessation of business

    9. 74.Employer failing to pay a Class 1A contribution

    10. 75.Specified amount of a Class 1A contribution

    11. 76.Interest on an overdue Class 1A contribution

    12. 77.Payment of interest on a repaid Class 1A contribution

    13. 78.Repayment of interest paid on a Class 1A contribution

    14. 79.Remission of interest on a Class 1A contribution

    15. 80.Return by employer

    16. 81.Penalties for failure to make a return and incorrect returns

    17. 82.Application of the Management Act to penalties for failure to make a return and incorrect returns

    18. 83.Set-off of Class 1A contributions falling to be repaid against earnings-related contributions

    19. 84.Special provisions relating to primary Class 1 contributions

    20. 85.Exception in relation to earnings to which regulation 84 applies

    21. 86.Special provisions relating to culpable employed earners and to secondary contributors or employers exempted by treaty etc., from enforcement of the Act or liability under it

    22. 87.Notification of commencement or cessation of payment of Class 2 or Class 3 contributions

    23. 88.Notification of change of address

    24. 89.Method of, and time for, payment of Class 2 and Class 3 contributions etc.

    25. 90.Arrangements approved by the Board for method of, and time for, payment of Class 2 and Class 3 contributions

  9. PART 8 CLASS 4 CONTRIBUTIONS

    1. 91.Exception from Class 4 liability of persons over pensionable age and persons not resident in the United Kingdom

    2. 92.Exception of divers and diving supervisors from liability for Class 4 contributions

    3. 93.Exception of persons under the age of 16 from liability for Class 4 contributions

    4. 94.Exception from Class 4 liability by reference to Class 1 contributions paid on earnings chargeable to income tax under Schedule D

    5. 95.Deferment of Class 4 liability where such liability is in doubt

    6. 96.Application for deferment of Class 4 liability

    7. 97.General conditions for application for, and issue of, certificates of exception and deferment

    8. 98.Revocation of certificates of exception and deferment

    9. 99.Calculation of liability for, and recovery of, Class 4 contributions after issue of certificate of deferment

    10. 100.Annual maximum of Class 4 contributions due under section 15 of the Act

    11. 101.Disposal of Class 4 contributions under section 15 of the Act which are not due

    12. 102.Repayment of Class 4 contributions under section 15 of the Act which are not due

    13. 103.Class 4 liability of earners treated as self-employed earners who would otherwise be employed earners

    14. 104.Notification of national insurance number and recording of category letter on deductions working sheet

    15. 105.Calculation of earnings for the purposes of special Class 4 contributions

    16. 106.Notification and payment of special Class 4 contributions due

    17. 107.Recovery of deferred Class 4 and special Class 4 contributions after appeal, claim or further assessment under the Income Tax Acts or appeal under section 8 of the Transfer Act

    18. 108.Annual maximum of special Class 4 contribution

    19. 109.Disposal of special Class 4 contributions paid in excess or error

    20. 110.Return of special Class 4 contributions paid in excess or error

  10. PART 9 SPECIAL CLASSES OF EARNERS

    1. Case A— Airmen

      1. 111.Interpretation

      2. 112.Modification of employed earner’s employment

      3. 113.Application of the Act and regulations

    2. Case B— Continental Shelf

      1. 114.Application to employment in connection with continental shelf of Part I of the Act and so much of Part VI of the Act as relates to contributions

    3. Case C— Mariners

      1. 115.Interpretation

      2. 116.Modification of section 162(5) of the Administration Act

      3. 117.Conditions of domicile or residence

      4. 118.Modification of employed earner’s employment

      5. 119.Modification of section 9(2) of the Act

      6. 120.Earnings periods for mariners and apportionment of earnings

      7. 121.Calculation of earnings-related contributions for mariners

      8. 122.Prescribed secondary contributors

      9. 123.Payments to be disregarded

      10. 124.Application of the Act and regulations

      11. 125.Modification in relation to share fishermen of Part I of the Act and so much of Part VI of the Act as relates to contributions

    4. Case D— Married Women and Widows

      1. 126.Interpretation

      2. 127.Elections by married women and widows

      3. 128.Duration of effect of election

      4. 129.Continuation of elections under regulation 91 of the 1975 Regulations

      5. 130.Continuation of elections on widowhood

      6. 131.Reduced rate

      7. 132.Class 3 contributions

      8. 133.Certificates of election

      9. 134.Special transitional provisions consequent upon passing of the Social Security Pensions Act 1975

      10. 135.Deemed election of married women and widows excepted from contribution liability under the National Insurance Act 1965

      11. 136.Special transitional provisions regarding deemed elections

      12. 137.Application of regulations 126 to 134 to elections and revocation of elections deemed made under regulations 135 and 136

      13. 138.Savings

      14. 139.Modification of the Act

    5. Case E— Members of the Forces

      1. 140.Establishments and organisations of which Her Majesty’s forces are taken to consist

      2. 141.Treatment of serving members of the forces as present in Great Britain

      3. 142.Treatment of contributions paid after that date

      4. 143.Special provisions concerning earnings-related contributions

      5. 144.Application of the Act and regulations

    6. Case F— Residence and Persons Abroad

      1. 145.Condition as to residence or presence in Great Britain or Northern Ireland

      2. 146.Payment of contributions for periods abroad

      3. 147.Class 2 and Class 3 contributions for periods abroad

      4. 148.Conditions of payment of Class 2 or Class 3 contributions for periods abroad

    7. CASE G— VOLUNTEER DEVELOPMENT WORKERS

      1. 149.Interpretation

      2. 150.Certain volunteer development workers to be self-employed earners

      3. 151.Option to pay Class 2 contributions

      4. 152.Special provisions as to residence, rate, annual maximum and method of payment

      5. 153.Late paid contributions

      6. 154.Modifications of the Act and these Regulations

  11. PART 10 MISCELLANEOUS PROVISIONS

    1. 155.Treatment of contribution week falling in two years

    2. 156.Northern Ireland

    3. 157.Revocations

  12. Signature

    1. SCHEDULE 1

      PROVISIONS CONFERRING POWERS EXERCISED IN MAKING THESE REGULATIONS

      1. PART I POWERS EXERCISED BY THE TREASURY

      2. PART II POWERS EXERCISED BY THE COMMISSIONERS OF THE INLAND REVENUE

    2. SCHEDULE 2

      CALCULATION OF EARNINGS FOR THE PURPOSES OF EARNINGS-RELATED CONTRIBUTIONS IN PARTICULAR CASES

      1. 1.Calculation of earnings

      2. 2.Calculation of earnings in respect of beneficial interest in assets within Part IV of Schedule 3

      3. 3.Valuation of beneficial interest in units in a unit trust scheme

      4. 4.Conferment of a beneficial interest in an option to acquire asset falling within Part IV of Schedule 3

      5. 5.Readily convertible assets

      6. 6.Assets not readily convertible: beneficial interests in alcoholic liquor on which duty has not been paid, gemstones and certain vouchers and non-cash vouchers

      7. 7.Conditional interest in shares

      8. 8.Convertible interest in shares

      9. 9.Assignment or release of right to acquire shares where neither right nor shares readily convertible

      10. 10.Assignment or release of a right, acquired as director or employee before 6th April 1999, to acquire shares where neither right nor shares readily convertible

      11. 11.Exercise of right to acquire shares gained as director or employee before 6th April 1999

      12. 12.Interpretation of paragraphs 9, 10 and 11

      13. 13.Apportionment of a payment from a retirement benefits scheme for the benefit of two or more people

      14. 14.Valuation of non-cash vouchers

      15. 15.Apportionment of earnings comprised in a cash or non-cash voucher provided for benefit of two or more employed earners

    3. SCHEDULE 3

      PAYMENTS TO BE DISREGARDED IN THE CALCULATION OF EARNINGS FOR THE PURPOSES OF EARNINGS-RELATED CONTRIBUTIONS

      1. PART I INTRODUCTORY

        1. 1.Introduction

        2. 2.Interpretation

      2. PART II PAYMENTS IN KIND

        1. 1.Certain payments in kind to be disregarded

        2. 2.Payments by way of assets not to be disregarded

      3. PART III PAYMENTS BY WAY OF READILY CONVERTIBLE ASSETS NOT DISREGARDED AS PAYMENTS IN KIND

        1. 1.A readily convertible asset. For the purposes of this paragraph,...

        2. 2.An asset which, in accordance with the provisions of section...

        3. 3.Any voucher, stamp or similar document— (a) whether used singularly...

      4. PART IV PAYMENTS BY WAY OF SPECIFIC ASSETS NOT DISREGARDED AS PAYMENTS IN KIND

        1. 1.Shares and stock

        2. 2.Certain debentures and other securities for loans

        3. 3.Loans stocks of public and local authorities

        4. 4.Warrants etc for loan stock and debentures

        5. 5.Units in collective investment schemes

        6. 6.Options to acquire assets, currency, precious metals or other options

        7. 7.Contracts for futures

        8. 8.Contracts for differences or to secure profit by reference to movements of indices

        9. 9.Alcoholic liquor on which duty has not been paid

        10. 10.Gemstones

        11. 11.Certificates etc. conferring rights in respect of assets

        12. 12.Vouchers

      5. PART V CERTAIN NON-CASH VOUCHERS TO BE DISREGARDED AS PAYMENTS IN KIND

        1. 1.(1) Subject to sub-paragraph (2), a non-cash voucher provided, to...

        2. 2.A non-cash voucher which is not treated as an emolument...

        3. 3.A non-cash voucher which is not treated as an emolument...

        4. 4.A non-cash voucher in respect of which an employed earner...

        5. 5.A non-cash voucher which is not chargeable to tax under...

        6. 6.A non-cash voucher which is not charged to tax under...

        7. 7.(1) A non-cash voucher provided in connection with all or...

        8. 8.A non-cash voucher provided to or for the benefit of...

      6. PART VI PENSIONS AND PENSION CONTRIBUTIONS

        1. 1.Pension payments and pension contributions to be disregarded

        2. 2.Personal pension contributions by employers

        3. 3.Approved schemes, relevant statutory schemes, pilots' benefit funds and schemes established by overseas governments

        4. 4.Funded unapproved retirement benefit schemes.

        5. 5.Payments to pension previously taken into account in calculating earnings

        6. 6.Payments in good faith to scheme solely for providing approved benefits.

        7. 7.Pensions exempt from UK taxation under double taxation agreements

      7. PART VII PAYMENTS IN RESPECT OF TRAINING AND SIMILAR COURSES

        1. 1.Payments in respect of training and similar payment disregarded

        2. 2.Work-related training

        3. 3.Education and training funded by employers

        4. 4.New Deal 50plus: employment grant and training credit

        5. 5.Retraining courses for recipients of jobseeker’s allowance

        6. 6.Payments to Jobmatch participants

        7. 7.Vouchers provided to Jobmatch participants

      8. PART VIII TRAVELLING, RELOCATION AND OTHER EXPENSES AND ALLOWANCES OF THE EMPLOYMENT

        1. 1.Travelling, relocation and incidental expenses disregarded

        2. 2.Relocation expenses

        3. 3.Travelling expenses—general

        4. 4.Travel and foreign travel expenses of overseas employees

        5. 5.Travel expenses of employees not domiciled in the United Kingdom

        6. 6.Travelling expenses of workers on offshore gas and oil rigs

        7. 7.Incidental expenses in connection with cars provided for private use

        8. 8.Car parking facilities

        9. 9.Specific and distinct payments of, or towards, expenses actually incurred

        10. 10.Council tax on accommodation provided for employee’s use

        11. 11.Rates on accommodation provided for employee’s use

        12. 12.Foreign service allowance

        13. 13.Commonwealth War Graves Commission and British Council: extra cost of living allowance

        14. 14.Overseas medical treatment

      9. PART IX SHARE INCENTIVES

        1. 1.Certain payments by way of shares, interests in shares and gains arising from them disregarded

        2. 2.Shares in secondary contributor or associated body

        3. 3.Rights to acquire shares

        4. 4.Enterprise management incentives

        5. 5.Priority share allocations

        6. 6.Partnership share agreements

        7. 7.Shares under employee share ownership plan

        8. 8.Shares under approved profit sharing schemes

        9. 9.Conditional interest in shares

        10. 10.Conditional interest in shares: gains from exercise etc. of share options

        11. 11.Convertible shares

        12. 12.Convertible shares: gains from the exercise etc. of share options

        13. 13.Share option gains by directors and employees

        14. 14.Shares acquired under options granted before 9th April 1998

        15. 15.Assignment or release of option

        16. 16.Exercise, assignment or release of options acquired before 6th April 1999

      10. PART X MISCELLANEOUS AND SUPPLEMENTAL

        1. 1.Other miscellaneous payments to be disregarded

        2. 2.Payments on account of sums already included in the computation of earnings

        3. 3.Payments discharging liability for secondary Class 1 contributions following election under paragraph 3B of Schedule 1 to the Contributions and Benefits Act

        4. 4.Payments by way of incidental expenses

        5. 5.Gratuities and offerings

        6. 6.Redundancy payments

        7. 7.Sickness payments attributable to contributions made by employed earner

        8. 8.Expenses and other payments not charged to tax under Extra-Statutory Concessions

        9. 9.VAT on the supply of goods and services by employed earner

        10. 10.Employee’s indemnity insurance

        11. 11.Fees and subscriptions to professional bodies, learned societies etc

        12. 12.Holiday pay

        13. 13.Payments to ministers of religion

        14. 14.Payments in lieu of coal

    4. SCHEDULE 4

      PROVISIONS DERIVED FROM THE INCOME TAX ACTS AND THE INCOME TAX (EMPLOYMENTS) REGULATIONS 1993

      1. PART I GENERAL

        1. 1.Interpretation

        2. 2.Multiple employers

        3. 3.Intermediate employers

        4. 4.Employer’s earnings-related contributions

        5. 5.Inspectors and Collectors

      2. PART II DEDUCTION OF EARNINGS-RELATED CONTRIBUTIONS

        1. 6.Deduction of earnings-related contributions

        2. 7.Calculation of deduction

        3. 8.Records where liability transferred from secondary contributor to employed earner: share option gains

        4. 9.Certificate of contributions paid

      3. PART III PAYMENT AND RECOVERY OF EARNINGS-RELATED CONTRIBUTIONS, CLASS 1A CONTRIBUTIONS AND CLASS 1B CONTRIBUTIONS, ETC.

        1. 10.Payment of earnings-related contributions monthly by employer

        2. 11.Payments of earnings-related contributions quarterly by employer

        3. 12.Payment of earnings-related contributions by employer (further provisions)

        4. 13.Payment of Class 1B contributions

        5. 14.Employer failing to pay earnings-related contributions

        6. 15.Specified amount of earnings-related contributions payable by the employer

        7. 16.Recovery of earnings-related contributions or Class 1B contributions

        8. 17.Interest on overdue earnings-related contributions or Class 1B contributions

        9. 18.Payment of interest on repaid earnings-related contributions or Class 1B contributions

        10. 19.Repayment of interest

        11. 20.Remission of interest for official error

        12. 21.Application of paragraphs 10, 12, 16, 17, 18, 19 and 20

        13. 22.Return by employer at end of year

        14. 23.Additional return by employer at end of year where liability transferred to employed earner: share option gains

        15. 24.Special return by employer at end of voyage period

        16. 25.Return by employer of recovery under the Statutory Sick Pay Percentage Threshold Order

        17. 26.Inspection of employer’s records

        18. 27.Death of an employer

        19. 28.Succession to a business, etc

        20. 29.Payments by cheque

      4. PART IV ASSESSMENT AND DIRECT COLLECTION

        1. 30.Provisions for direct payment

        2. 31.Direct collection involving deductions working sheets

    5. SCHEDULE 5

      ELECTIONS ABOUT SHARE OPTION GAINS

      1. 1.(1) An election for the purposes of paragraph 3B(1) of...

      2. 2.(1) An election to which this Schedule applies shall be...

      3. 3.(1) Where an election to which this Schedule applies has...

    6. SCHEDULE 6

      1. PART I PRESCRIBED ESTABLISHMENTS AND ORGANISATIONS FOR THE PURPOSES OF SECTION 116(3) OF THE ACT

        1. 1.Any of the regular naval, military or air forces of...

        2. 2.Royal Fleet Reserve.

        3. 3.Royal Naval Reserve.

        4. 4.Royal Marines Reserve.

        5. 5.Army Reserve.

        6. 6.Territorial Army.

        7. 7.Royal Air Force Reserve.

        8. 8.Royal Auxiliary Air Force.

        9. 9.The Royal Irish Regiment, to the extent that its members...

      2. PART II ESTABLISHMENTS AND ORGANISATIONS OF WHICH HER MAJESTY'S FORCES SHALL NOT CONSIST

        1. 10.By virtue of regulation 140, Her Majesty’s forces shall not...

    7. SCHEDULE 7

      Corresponding Northern Ireland Enactments

      1. 1.In this Schedule— “the 1998 Order” means the Social Security...

      2. PART I ENACTMENTS CORRESPONDING TO PRIMARY LEGISLATION APPLICABLE TO GREAT BRITAIN

      3. PART II ENACTMENTS CORRESPONDING TO SUBORDINATE LEGISLATION APPLICABLE TO GREAT BRITAIN

    8. SCHEDULE 8

      REVOCATIONS

      1. PART I REVOCATIONS APPLICABLE TO GREAT BRITAIN OR TO THE UNITED KINGDOM

      2. PART II REVOCATIONS APPLICABLE TO NORTHERN IRELAND

  14. Explanatory Note

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