The Social Security (Contributions) Regulations 2001

• (1) Subject to paragraph (2), regulations 126 to 134, save only in so far as inconsistent with regulations 135 and 136, shall apply to any election deemed to have been made under regulation 91 of the 1975 Regulations by virtue of regulation 135 as if it had been made under, and in accordance with, regulation 127 except that the Board shall not be obliged to issue a certificate, and as if any revocation which is deemed to be made under regulation 136 were made under, and in accordance with, regulation 127(5).

• (2) Where a woman who under regulation 135 is not liable for a primary Class 1 contribution otherwise than at the reduced rate and to whom no certificate of election under the Act has been issued becomes employed in employed earner’s employment, she shall make application in writing to the Board for such a certificate and, notwithstanding paragraph (1), the Board shall issue such a certificate to her.

Savings

138

For the purpose of facilitating the introduction of the scheme of social security contributions within the meaning of paragraph 9(1)(a)(i) of Schedule 3 to the Social Security (Consequential Provisions) Act 1975 regulations 2(2) (married women who are employed persons), 3(2) (married women who are self-employed persons), 4(2) (married women who are non-employed persons) and 16 (notice of marriage) of the National Insurance (Married Woman) Regulations 1973 shall be saved.

Modification of the Act

139

Part 1, Part 2 (except section 60), and Parts 3 and 4 of the Act shall have effect as respects married woman and widows subject to the modifications contained in this Case.

Case E— — Members of the Forces

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

140

Except in relation to the employment in any of the establishments or organisations specified in Part I of Schedule 6 of any person specified in Part II of that Schedule, Her Majesty’s forces shall, for the purpose of the Act, be taken to consist of the establishments and organisations specified in Part I of that Schedule, and this Case shall be construed accordingly.

Treatment of serving members of the forces as present in Great Britain

141

For the purposes of regulation 145(1)(a) a serving member of the forces shall, in respect of his employment as such, be treated as present in Great Britain .

Treatment of contributions paid after that date

142

For the purpose of any entitlement to benefit, any earnings-related contributions paid after the due date in respect of earnings paid to or for the benefit of a person in respect of his employment as a member of the forces shall be treated as paid on that date.

Special provisions concerning earnings-related contributions

143

• (1) For the purposes of earnings-related contributions, there shall be excluded from the computation of a person’s earnings as a serving member of the forces any payment in so far as it is—

• (a) a payment of or in respect of an Emergence Service grant;

• (b) a payment of any sum referred to in sections 297 and 298 of ITEPA 2003 (armed forces' food, drink and mess allowances and reserve and auxiliary forces' training allowances); or

• (c) a payment of liability bounty in recognition of liability for immediate call-up in times of emergency.

• (2) The earnings period for a person who is a serving member of the forces shall be as follows—

• (a) in the case of a person serving in the regular naval, military or air forces of the Crown, whatever is the accounting period from time to time applying in his case under the Naval Pay Regulations or, as the case may be, the Army Pay Warrant, Queen’s Regulations for the Army or for the Royal Air Force or the Air Council Instructions; or

• (b) in the case of a person undergoing training in any of the establishments or organisations specified in paragraphs 2 to 9 of Part I of Schedule 6, a month.

Application of the Act and regulations

144

• (1) The provisions of Part I of the Act and so much of Part VI of the Act as relates to contributions and the regulations made under those provisions shall, in so far as they are not inconsistent and the provisions of this Case, apply in relation to persons who are serving members of the forces with the modification prescribed in paragraph (2).

• (2) The modification is that where any such person is, on account of his being at sea or outside the United Kingdom by reason of his employment as a serving member of the forces, unable to perform an act required to be done either immediately or on the happening of a certain event or within a specified time, he shall be deemed to have complied with that requirement if he performs the act as soon as is reasonably practicable, although after the happening of the event or the expiration of the specified time,

Case F— — Residence and Persons Abroad

Condition as to residence or presence in Great Britain or Northern Ireland

145

• (1) Subject to paragraph (2), for the purposes of section 1(6) of the Act (conditions as to residence or presence in Great Britain for liability or entitlement to pay Class 1 or Class 2 contributions, liability to pay Class 1A or Class 1B contributions or entitlement to pay Class 3 Contributions) the conditions as to residence or presence in Great Britain or Northern Ireland (as the case requires) shall be—

• (a) as respects liability of an employed earner to pay primary Class 1 contributions in respect of earnings for an employed earner’s employment, that the employed earner is resident or present in Great Britain or Northern Ireland(or but for any temporary absence would be present in Great Britain or Northern Ireland) at the time of that employment or is then ordinarily resident in Great Britain or Northern Ireland (as the case may be);

• (b) as respect liability to pay secondary Class 1 contributions, Class 1A contributions or Class 1B contributions that the person who, but for any conditions as to residence or presence in Great Britain or Northern Ireland (as the case may be and including the having of a place of business in Great Britain or Northern Ireland), would be the secondary contributor or the person liable for the payment of Class 1B contributions (in this Case referred to as “the employer”) is resident or present in Great Britain or Northern Ireland when such contributions become payable or then has a place of business in Great Britain or Northern Ireland (as the case may be), so however that nothing in this paragraph shall prevent the employer paying the said contributions if he so wishes;

• (c) as respects entitlement of a self-employed earner to pay Class 2 contributions, that that earner is present in Great Britain or Northern Ireland (as the case may be) in the contribution week for which the contribution is to be paid;

• (d) as respects the application of section 11(5B) of the Act (self-employed earners treated as having actually paid Class 2 contributions for relevant purposes), that the self-employed earner is ordinarily resident in Great Britain or Northern Ireland (as the case may be), or, if he is not so ordinarily resident, that before the period in respect of which any such contributions are to be ... treated as having actually been paid, he has been resident in Great Britain (as the case may be) for a period of at least 26 out of the immediately preceding 52 contribution weeks under the Act, the Social Security Act 1975 or the National Insurance Act 1965 or under some or all of those Acts.

• (e) as respects entitlement of a person to pay Class 3 contributions in respect of any year, either that—

• (i) that person is resident in Great Britain or Northern Ireland (as the case may be) throughout the year,

• (ii) that person has arrived in Great Britain or Northern Ireland (as the case may be) during that year and has been or is liable to pay Class 1 ... contributions or has been or will be treated as having actually paid Class 2 contributions (as a result of section 11(5B) of the Act) in respect of an earlier period during that year,

• (iii) that person has arrived in Great Britain or Northern Ireland (as the case may be) during that year and was either ordinarily resident in Great Britain or Northern Ireland (as the case may be) throughout the whole of that year or became ordinarily resident during the course of it, or

• (iv) that person not being ordinarily resident in Great Britain or Northern Ireland (as the case may be), has arrived in that year or the previous year and has been continuously present in Great Britain or Northern Ireland (as the case may be) for 26 complete contribution weeks, entitlement where the arrival has been in the previous year arising in respect only of the next year.

• (2) Where a person is ordinarily neither resident nor employed in the United Kingdom and, in pursuance of employment which is mainly employment outside the United Kingdom by an employer whose place of business is outside the United Kingdom (whether or not he also has a place of business in the United Kingdom) that person is employed for a time in Great Britain or Northern Ireland (as the case may be) as an employed earner and, but for the provisions of this paragraph, the provisions of sub-paragraph (a) of paragraph (1) would apply, the conditions prescribed in that sub-paragraph and in sub-paragraph (b) of that paragraph shall apply subject to the proviso that—

• (a) no primary or secondary Class 1 contribution shall be payable in respect of the earnings of the employed earner for such employment;

• (b) no Class 1A contribution shall be payable in respect of something which is made available to the employed earner or to a member of his family or household by reason of such employment; and

• (c) no Class 1B contribution shall be payable in respect of any PAYE settlement agreement in connection with such employment, after the date of the earner’s last entry into Great Britain or Northern Ireland (as the case may be) and before he has been resident in Great Britain or Northern Ireland (as the case may be) for a continuous period of 52 contribution weeks from the beginning of the contribution week following that in which that date falls.

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment of contributions for periods abroad

146

• (1) Where an earner is gainfully employed outside the United Kingdom, and that employment, if it had been in Great Britain or Northern Ireland, would have been employed earner’s employment, that employment outside the United Kingdom shall be treated as employed earner’s employment for the period for which under paragraph (2)(a) contributions are payable in respect of the earnings paid to the earner in respect of that employment provided that—

• (a) the employer has a place of business in Great Britain or Northern Ireland (as the case may be);

• (b) the earner is ordinarily resident in Great Britain or Northern Ireland (as the case may be); and

• (c) immediately before the commencement of the employment the earner was resident in Great Britain or Northern Ireland (as the case may be).

• (2) Where, under paragraph (1), the employment outside the United Kingdom is treated as an employed earner’s employment, the following provisions shall apply in respect of the payment of contributions—

• (a) primary and secondary Class 1 contributions shall be payable in respect of any payment of earnings for the employment outside the United Kingdom during the period of 52 contribution weeks from the beginning of the contribution week in which that employment begins to the same extent as that to which such contributions would have been payable if the employment had been in Great Britain or Northern Ireland (as the case may be);

• (b) subject to regulations 148 and 148A, any earner by or in respect of whom contributions are or have been payable under sub-paragraph (a) shall be entitled to pay Class 3 contributions in respect of any year during which the earner is outside the United Kingdom from and including that in which the employment outside the United Kingdom begins until that in which he next returns to Great Britain or Northern Ireland (as the case may be);

• (c) Class 1A contributions and Class 1B contributions shall be payable in respect of the period specified in sub-paragraph (a).

Class 2 and Class 3 contributions for periods abroad

147

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) Subject to paragraph (4), the conditions referred to in paragraph (5)(a)(i) are that—

• (a) the person has been resident in Great Britain or Northern Ireland (as the case may be) for a continuous period of not less than three years at any time before the period for which the contributions are to be paid;

• (b) there have been paid by or on behalf of that person contributions of the appropriate amount—

• (i) for each of 3 years ending at any time before the relevant period,

• (ii) for each of 2 years ending at any time before the relevant period and, in addition, 52 contributions under either or both the Social Security Act 1975 or the National Insurance Act 1965, or

• (iii) for any one year ending at any time before the relevant period and, in addition, 104 contributions under either or both the Social Security Act 1975 or the National Insurance Act 1965, or

• (c) there have been paid by or on behalf of that person 156 contributions under either or both the Social Security Act 1975 or the National Insurance Act 1965.

• (4) In paragraph (3)—

• “contributions of the appropriate amount” means contributions under the Act the earnings factor derived from which is not less than 52 times the lower earnings limit for the time being for primary Class 1 contributions;

• “contributions under either or both the Social Security Act 1975 or the National Insurance Act 1965” means contributions of any class under section 4, 7 or 8 of the Social Security Act 1975 or section 3 of the National Insurance Act 1965 in respect of any period; and

• “the relevant period” means the period for which it is desired to pay the ... Class 3 contributions specified in paragraph (5)(a).

• (5) Subject to paragraphs (8) to (10), regulations 148 and 148A and notwithstanding the provisions of regulation 145(1)(e), a person may pay Class 3 contributions in respect of any tax year beginning after 5th April 2026 which includes a period during which the person is outside the United Kingdom if—

• (a) the person—

• (i) satisfies the conditions specified in paragraph (3),

• (ii) is a person to whom either of paragraphs (6) or (7) applies, and

• (iii) is not a person to whom regulation 146(2)(a) applies, or

• (b) the person—

• (i) satisfies the condition specified in paragraph (11), and

• (ii) is not a person to whom regulation 146(2)(a) applies.

• (6) This paragraph applies to a person who has paid Class 2 contributions in respect of either or both of the tax years 2024-25 and 2025-26 pursuant to paragraph (1), as it applies in relation to contributions in respect of tax years ending before 6th April 2026, before the earlier of—

• (a) the time when the person pays Class 3 contributions pursuant to paragraph (5)(a) in respect of the tax year 2026-27, or

• (b) 6th April 2027.

• (7) This paragraph applies to a person who has paid Class 3 contributions in respect of either or both of the tax years 2024-25 and 2025-26 pursuant to paragraph (1), as it applies in relation to contributions in respect of tax years ending before 6th April 2026, before the earlier of—

• (a) the time when the person pays Class 3 contributions pursuant to paragraph (5)(a) in respect of the tax year 2026-27, or

• (b) 6th April 2027.

• (8) Class 3 contributions in respect of a tax year beginning after 5th April 2026 may not be made by a person pursuant to paragraph (5)(a) after the earlier of—

• (a) the relevant date determined in accordance with regulation 87AA(3)(b) by a person who has, or who should have, notified HMRC pursuant to regulation 87AA that the person wishes to cease making Class 3 contributions in respect of a tax year beginning after 5th April 2026, or

• (b) the time when the person became entitled to pay Class 3 contributions pursuant to regulation 145(1)(e) in respect of a tax year beginning after 5th April 2026.

• (9) Class 3 contributions pursuant to paragraph (5)(a) may not be made by a person in respect of whom paragraph (6) applies if that person has not—

• (a) notified HMRC of the person’s entitlement to pay the Class 2 contributions described in paragraph (6) in accordance with regulation 87, 87A or 87AA before 6th April 2026, or

• (b) notified HMRC of the person’s entitlement to pay Class 3 contributions pursuant to paragraph (5)(a) in accordance with regulation 87AA before the earlier of—

• (i) the time when the person pays Class 3 contributions pursuant to paragraph (5)(a), or

• (ii) 6th April 2027.

• (10) Class 3 contributions pursuant to paragraph (5)(a) may not be made by a person in respect of whom paragraph (7) applies if that person has not notified HMRC of the person’s entitlement to pay the Class 3 contributions, as it applied in relation to contributions in respect of tax years ending before 6th April 2026, in accordance with regulation 87, 87A or 87AA before 6th April 2026.

• (11) The condition referred to in paragraph (5)(b)(i) is satisfied in relation to the person by or on behalf of whom Class 3 contributions pursuant to paragraph (5)(b) are to be paid if—

• (a) the person has been resident in Great Britain or Northern Ireland (as the case may be) for a continuous period of not less than 10 years ending at any time before the time when Class 3 contributions pursuant to paragraph (5)(b) are to be paid, or

• (b) in respect of each of 10 years ending at any time before the time when Class 3 contributions pursuant to paragraph (5)(b) are paid, qualifying contributions have been paid, by or on behalf of the person pursuant to—

• (i) the payment of contributions abroad regulations,

• (ii) the residence and presence regulations, or

• (iii) the volunteer development workers regulations.

• (12) For the purposes of paragraph (11)—

• “the payment of contributions abroad regulations” means—regulation 146(2)(a) (payment of contributions for periods abroad);regulation 3(2)(a) of the National Insurance (Residence and Persons Abroad) Regulations, 1948 (payment of contributions in respect of periods abroad);regulation 3A(2)(a) of the National Insurance (Residence and Persons Abroad) Regulations (Northern Ireland) 1948;regulation 114(2)(a) of the Social Security (Contributions) Regulations 1975 (payment of contributions for periods abroad);regulation 106(2)(a) of the Social Security (Contributions) Regulations (Northern Ireland) 1975 (payment of contributions for periods abroad);regulation 120(2)(a) of the Social Security (Contributions) Regulations 1979 (payment of contributions for periods abroad);regulation 112(2)(a) of the Social Security (Contributions) Regulations (Northern Ireland) 1979 (payment of contributions for periods abroad);

• “qualifying contributions” in respect of a year means—contributions under the Act the earnings factor derived from which is not less than 52 times the lower earnings limit for the time being for primary Class 1 contributions in respect of that year;52 contributions of any class under section 4, 7 or 8 of the Social Security Act 1975 paid in respect of that year;52 contributions under section 3 of the National Insurance Act 1965 paid in respect of that year;

• “the residence and presence regulations” means—regulation 145(1) (condition as to residence or presence in Great Britain or Northern Ireland);regulation 2 of the National Insurance (Residence and Persons Abroad) Regulations, 1948 (residence condition);regulation 2 of the National Insurance (Residence and Persons Abroad) Regulations (Northern Ireland) 1948 (residence condition);regulation 2 of the National Insurance (Residence and Persons Abroad) Regulations (Northern Ireland) 1973 (conditions as to residence in Northern Ireland);regulation 113 of the Social Security (Contributions) Regulations 1975 (conditions as to residence or presence in Great Britain);regulation 105 of the Social Security (Contributions) Regulations (Northern Ireland) 1975 (conditions as to residence or presence in Northern Ireland);regulation 119 of the Social Security (Contributions) Regulations 1979 (conditions as to residence or presence in Great Britain);regulation 111 of the Social Security (Contributions) Regulations (Northern Ireland) 1979 (conditions as to residence or presence in Northern Ireland);

• “the volunteer development workers regulations” means—regulation 151 (option to pay Class 2 contributions);regulation 123C (option to pay Class 2 contributions) of the Social Security (Contributions) Regulations 1979;regulation 115C (option to pay Class 2 contributions) of the Social Security (Contributions) (Northern Ireland) Regulations 1979.

Conditions of payment of Class 2 or Class 3 contributions for periods abroad

148

Entitlement to pay ... Class 3 contributions under regulations 146 and 147 shall be subject to the following conditions—

• (a) that the payment is made within the period specified in regulation 48(3)(b)(i); and

• (b) that the payment is made only to the extent to which it could have been made if the contributor had been present in Great Britain or Northern Ireland (as the case may by) and otherwise entitled to make it.

CASE G— — VOLUNTEER DEVELOPMENT WORKERS

Interpretation

149

• (1) In this Case “volunteer development worker” means a person in respect of whom the Board has certified that it is consistent with the proper administration of the Act that, subject to the satisfaction of the conditions in paragraph (2), that person should be entitled to pay Class 2 contributions under regulation 151.

• (2) The conditions are—

• (a) that that person is ordinarily resident in Great Britain or Northern Ireland (as the case may be); and

• (b) that he is employed outside the United Kingdom .

Certain volunteer development workers to be self-employed earners

150

Any employment as a volunteer development worker, which is not employment in respect of earnings from which Class 1 contributions are payable, or, where section 6A of the Act applies , are treated as having been paid, shall be employment as a self-employed earner notwithstanding that it is not employment in Great Britain or Northern Ireland.

Option to pay Class 2 contributions

151

Notwithstanding section 11(1) of the Act and regulation 150, a volunteer development worker who by virtue of that regulation is a self-employer earner—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) shall be entitled to pay a Class 2 contribution if he so wishes at the rate prescribed in regulation 152(b).

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

152

In relation to the Class 2 contributions a volunteer development worker is entitled to pay by virtue of regulation 151—

• (a) the provision of Case F of these Regulations shall not apply;

• (b) the weekly rate of any Class 2 contributions payable by a volunteer development worker for any contribution week while he is ordinarily employed as a volunteer development worker shall, notwithstanding the provisions of section 11(2) of the Act (Class 2 contributions) be 5 per cent. of the lower earnings limit for the year in which falls the week in respect of which the contribution is paid;

• (c) for the purpose of determining the extent of an earner’s liability for contributions under regulation 21 the amount prescribed in that regulation shall be reduced by the amount of any contributions paid in respect of the year in question by virtue of regulation 151; and

• (d) regulation 89 shall not apply.

Late paid contributions

153

• (1) This regulation applies to any Class 2 contribution a volunteer development worker is entitled to pay by virtue of regulation 151, which is paid in respect of a week falling within a tax year (“the contribution year”) earlier than the tax year in which it is paid.

• (2) Section 12 of the Act (late paid Class 2 contributions) shall not apply.

• (3) Subject to paragraph (4), the amount of a contribution to which this regulation applies shall be the amount which the volunteer development worker would have had to pay if he had paid the contribution in the contribution year.

• (4) In any case where—

• (a) the volunteer development worker pays a contribution to which this regulation applies after the end of the tax year immediately following the contribution year; and

• (b) the weekly rate of contributions applicable under regulation 152(b), for the week in respect of which the contribution is paid, differs from the weekly rate so applicable at the time of payment,

the amount of the contributions shall be computed by reference to the highest weekly rate of contrinbutions applicable in the period from the week in respect of which the contribution is paid to the day on which it is paid.

Modifications of the Act and these Regulations

154

Part 1 of the Act and these Regulations shall have effect as respects volunteer development workers subject to the modification contained in this Case.

PART 10 — MISCELLANEOUS PROVISIONS

Treatment of contribution week falling in two years

155

For the purposes of Class 2 contributions, where a contribution week falls partly in one year and partly in another, it shall be treated as falling wholly within the year in which it begins.

Northern Ireland

156

• (1) Except where otherwise provided, the provisions of these Regulations shall apply to Northern Ireland as they apply to Great Britain.

• (2) Paragraph (1) does not apply to the provisions of Case B... of Part 9 of these Regulations.

• (3) In the application of these Regulations to Northern Ireland other than this regulation, a reference to a provision of an enactment, which applies only to Great Britain shall be construed so far as necessary as including a reference to the corresponding enactment applying in Northern Ireland.

• (4) Schedule 7 contains a Table showing, in column (1) details of enactments applying in Great Britain for which the enactment shown in column (2) is the corresponding enactment in Northern Ireland.

• (5) The reference—

• (a) to an Order in Council under section 179 of the Administration Act shall be taken to include a reference to an order under section 155 of the Social Security Administration (Northern Ireland) Act 1992 ; and

• (b) to the Secretary of State in regulation 59(3)(b) shall be taken to include a reference to the Department of Health and Social Services for Northern Ireland, but any other reference to the Secretary of State shall be taken to include a reference to the Department for Social Development.

• (6) The rate of interest prescribed for the purposes of regulations 75 and 76(1) and paragraphs 17(1) and 18(1) and (3) of Schedule 4, in their application to Northern Ireland, is the rate applicable under paragraph 6(3)(a) of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 for the purpose of paragraph 6(3) of Schedule 1 to the Social Security Contributions and Benefits Act 1992.

Revocations

157

• (1) The Regulations specified in column (1) of Parts I and II of Schedule 8 are revoked to the extent mentioned in column (3) of that Schedule.

• (2) Anything done, permitted to be done or required to be done, under any provision of the instruments revoked by these Regulations shall be treated as though it had been done or were permitted or required to be done (as the case may be) under the corresponding provision of these Regulations.

• (3) Without prejudice to the generality of paragraph (2), a person who would have been liable, immediately before the revocation of regulation 53A(4) of the Social Security (Contributions) Regulations 1979 by paragraph (1) to a penalty in respect of a failure which commenced before these Regulations come into force shall continue to be liable to that penalty.

• (4) The revocation by these Regulations of an instrument which itself revoked an earlier instrument subject to savings does not prevent the continued operation of those savings, insofar as they are capable of continuing to have effect.

• (5) In this regulation “instrument” includes a Statutory Rule of Northern Ireland.

SCHEDULE 1 — PROVISIONS CONFERRING POWERS EXERCISED IN MAKING THESE REGULATIONS

In this Schedule—

• “the 1998 Act” means the Social Security Act 1998¹¹⁷;

• “the 1988 Order” means the Social Security (Northern Ireland Order 1998¹¹⁸;

• “the 2000 Act” means the Child Support, Pensions and Social Security Act 2000¹¹⁹;

• “the Transfer Act” means the Social Security Contributions (Transfer of Functions, etc.) Act 1999¹²⁰

• “the Transfer Order” means the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999¹²¹; and

• “the Welfare Reform Act” means the Welfare Reform and Pensions Act 1999¹²².

PART I — POWERS EXERCISED BY THE TREASURY

Column (1)	Column (2)
Enabling power	Relevant amendment
Social Security Contributions and Benefits Act 1992
Section 1(6) and (7)	Paragraph 56(3) of Schedule 7 to the 1998 Act and paragraph 1(3) of Schedule 3 to the Transfer Act.
Section 3(2), (2A), (3) and (5)	Section 48 and 49 of the 1998 Act and paragraph 3 of Schedule 3 to the Transfer Act.
Section 4(5), (6) and (7)	Section 50 of the 1998 Act, paragraph 4 of Schedule 3 to the Transfer Act and section 74(3) of the 2000 Act.
Section 5(1), (4) and (6)	Paragraph 1 of Schedule 9 to the Welfare Reform Act.
Section 6(3), (6) and (7)	Paragraph 2 of Schedule 9 to the Welfare Reform Act.
Section 6A(2) and (7)	Paragraph 3 of Schedule 9 to the Welfare Reform Act.
Section 10(9)
Section 10A(7)	Paragraph 11 of Schedule 3 to the Transfer Act.
Section 11(3), (4) and (5)	Paragraph 12 of Schedule 3 to the Transfer Act and article 3 of S.I. 2001/477.
Section 12(6)	Paragraph 13 of Schedule 3 to the Transfer Act.
Section 13(1) and (7)	Paragraph 14(2) and (4) of Schedule 3 to the Transfer Act, and article 4 of S.I. 2001/477.
Section 14(1), (2) and (5)	Paragraph 15 of Schedule 3 to the Transfer Act.
Section 19(1) to (5A)	Paragraph 19(2) of Schedule 3 to the Transfer Act.
Section 19A(2) and (3)	Paragraph 20 of Schedule 3, and paragraph 4 of Schedule 9, to the Transfer Act.
Section 116(2) and (3)	Paragraph 28 of Schedule 2 to the Jobseekers Act 1995, paragraph 67 of Schedule 7 to the 1998 Act and paragraph 22 of Schedule 3, and paragraph 5 of Schedule 7 to the Transfer Act.
Section 117	Paragraph 68 of Schedule 7 to the 1998 Act and paragraph 23 of Schedule 3 to, and paragraph 6 of Schedule 7 to, the Transfer Act.
Section 118	Paragraph 24 of Schedule 3 to the Transfer Act.
Section 119	Paragraph 69 of Schedule 7 to the 1998 Act and paragraph 25 of Schedule 3, and paragraph 7 of Schedule 7 to, the Transfer Act.
Section 120	Paragraph 70 of Schedule 7 to the 1998 Act and paragraph 26 of Schedule 3, and paragraph 8 of Schedule 7 to the Transfer Act.
Section 122(1)
Section 175(3), (4) and (5)	Paragraph 29(4) of Schedule 3 to the Transfer Act.
Schedule 1
Paragraph 7A	Paragraph 37 of Schedule 3 to, and paragraph 6 of Schedule 9 to, the Transfer Act.
Paragraph 7B	Paragraph 38 of Schedule 3, and paragraph 7 of Schedule 9, and the relevant entry in Part I of Schedule 10, to the Transfer Act, and section 76(3) and (4) of the 2000 Act.
Paragraph 8(1)(a), (c), (ca) , (e), (f), (g), (h), (ia) , (j), (k), (l), (m) and (q) and (1A)	Paragraph 14 of Schedule 5 to the Pensions Act 1995 , paragraph 77(15) and (16) of Schedule 7 to the 1998 Act, paragraph 39 of Schedule 3 to the Transfer Act and section 74(5) and 77(4) and (5) of the 2000 Act.
Paragraph 11	Paragraph 41 of Schedule 3 to the Transfer Act.
Social Security Contributions and Benefits (Northern Ireland) Act 1992
Section 1(6) and (7)	Paragraph 38(3) of Schedule 6 to the 1998 Order and paragraph 2 of Schedule 3 to the Transfer Order.
Section 3(2), (2A), (3) and (5)	Articles 45 and 46 of the 1998 Order and paragraph 4 of Schedule 3 to the Transfer Order.
Section 4(5), (6) and (7)	Paragraph 5 of Schedule 3 to the Transfer Order and section 78(3) of the 2000 Act.
Section 5(1), (4) and (6)	Paragraph 1 of Schedule 10 to the Welfare Reform Act.
Section 6(3), (6) and (7)	Paragraph 2 of Schedule 10 to the Welfare Reform Act.
Section 6(A)(2) and (7)
Section 10(9)
Section 10A(7)	Paragraph 12 of Schedule 3 to the Transfer Order.
Section 11(3), (4) and (5)	Paragraph 13 of Schedule 3 to the Transfer Order and article 3 of S.I. 2001/477.
Section 12(6)	Paragraph 14 of Schedule 3 to the Transfer Order.
Section 13(1) and (7)	Paragraph 15(2) and (4) of Schedule 3 to the Transfer Order and article 4 of S.I. 2001/477.
Section 14(1), (2) and (5)	Paragraph 16 of Schedule 3 to the Transfer Order.
Section 19(1) to (5A)	Paragraph 19(2) of Schedule 3 to the Transfer Order.
Section 116(2) and (3)	Paragraph 11 of Schedule 2 to the Jobseekers (Northern Ireland) Order 1995, paragraph 49 of Schedule 6 to the 1998 Order and paragraph 22 of Schedule 3, and paragraph 4 of Schedule 6 to the Transfer Order.
Section 117	Paragraph 50 of Schedule 6 to the 1998 Order and paragraph 23 of Schedule 3, and paragraph 5 of Schedule 6 to, the Transfer Order.
Section 118	Paragraph 24 of Schedule 3 to the Transfer Order.
Section 119	Paragraph 51 of Schedule 6 to the 1998 Order and paragraph 25 of Schedule 3, and paragraph 6 of Schedule 6 to the Transfer Order.
Section 121(1)
Section 171(3), (4), (5) and (10)	Paragraph 36 of Schedule 1 to the Social Security (Incapacity for Work) (Northern Ireland) Order 1994
Schedule 1
Paragraph 7A	Paragraph 36 of Schedule 3, and paragraph 4 of Schedule 8, to the Transfer Order.
Paragraph 7B	Paragraph 37 of Schedule 3, and paragraph 5 of Schedule 8, and the relevant entry in Part 1 of Schedule 9 to the Transfer Order and section 80(3) and (4) of the 2000 Act.
Paragraph 8(1)(a), (c), (ca) , (e), (f), (g), (h), (ia) , (j), (k), (l), (m) and (q) and (1A)	Paragraph 11 of Schedule 3 to the Pensions (Northern Ireland) Order 1995 , paragraph 58(15) and (16) of Schedule 6 to the 1998 Order, paragraph 38 of Schedule 3 to the Transfer Order and sections 78(5) and 81(4) and (5) of the 2000 Act.
Paragraph 10	Paragraph 19 of Schedule 21 to the Friendly Societies Act 1992 and paragraph 40 of Schedule 3 to the Transfer Order.

PART II — POWERS EXERCISED BY THE COMMISSIONERS OF THE INLAND REVENUE

Column (1)	Column (2)
Enabling power	Relevant amendment
Social Security Contributions and Benefits Act 1992
Section 17(1), (2), (3) and (4)	Paragraph 6 of Schedule 1, paragraph 17 of Schedule 3, and the relevant entry in Part I of Schedule 10 to, the Transfer Act.
Section 18	Paragraph 7 of Schedule 1, and paragraph 18 of Schedule 3, to the Transfer Act and article 5 of S.I. 2001/477.
Section 122(1)
Schedule 1
Paragraph 1	Section 148(2), (3) and (4) of the Pensions Act 1995, paragraph 77(2), (3) and (4) of Schedule 7 to the 1998 Act, paragraph 31 of Schedule 3 to the Transfer Act and paragraph 78(2) to (5) of Schedule 12 to, and Part VI of Schedule 13, to the Welfare Reform Act.
Paragraph 2	Paragraph 32 of Schedule 3 to the Transfer Act.
Paragraph 3	Section 55 of, and paragraph 77(5) of Schedule 7 to the 1998 Act, paragraph 33 of Schedule 3 to the Transfer Act, section 77(1) of and Part VIII of Schedule 9 to the 2000 Act.
Paragraph 3B(11)
Paragraph 4	Paragraph 16 of Schedule 1 and paragraph 34 of Schedule 3 to the Transfer Act.
Paragraph 5	Paragraph 77(6) of Schedule 7 to the 1998 Act, paragraph 34 of Schedule 3 to the Transfer Act and section 74(4) of the 2000 Act.
Paragraph 5A	Paragraph 34 of Schedule 3 to the Transfer Act.
Paragraph 6	Paragraph 77(8), (9), and (11) of Schedule 7 to, and the relevant entry in Schedule 8 to the 1998 Act and paragraph 17 of Schedule 1, paragraph 35 of Schedule 3, paragraph 9 of Schedule 7, paragraph 5 of Schedule 9, and the relevant entry in Part 1 of Schedule 10, to the Transfer Act
Paragraph 7BA	Paragraph 7BA
The Social Security Administration Act 1992
Section 113	Section 60 of the 1998 Act, paragraph 5 of Schedule 5 to the Transfer Act and paragraph 7 of Schedule 6 to the 2000 Act.
Section 162(12)	Paragraph 52(11) of Schedule 3 to the Transfer Act.
Section 191
Social Security Contributions and Benefit (Northern Ireland) Act 1992
Section 17	Paragraph 7 of Schedule 1, paragraph 17 of Schedule 3, and the relevant entry in Part I of Schedule 9 to, the Transfer Order.
Section 18	Paragraph 8 of Schedule 1 to, and paragraph 18 of Schedule 3 to the Transfer Order and article 5 of S.I. 2001/477.
Section 121(1)
Schedule 1
Paragraph 1	Article 145(2), (3) and (4) of the Pensions (Northern Ireland) Order 1995, paragraph 58(1) to (4) of Schedule 6 to the 1998 Order, paragraph 30 of Schedule 3 to the Transfer Order and paragraph 86(2) to (5) of Schedule 12, and the relevant entry in Part VI of Schedule 13 to, the Welfare Reform Act.
Paragraph 2	Paragraph 31 of Schedule 3 to the Transfer Order.
Paragraph 3	Article 52 of, and paragraph 58(5) of Schedule 6 to, the 1998 Order, paragraph 32 of Schedule 3 to the Transfer Order, section 81(1) of, and the relevant entry in Part VIII of Schedule 9 to, the 2000 Act.
Paragraph 3B(11)
Paragraph 4	Paragraph 16 of Schedule 1, and paragraph 33 of Schedule 3 to the Transfer Order.
Paragraph 5	Paragraph 58(6) of Schedule 7 to the 1998 Order, paragraph 34 of Schedule 3 to the Transfer Order and section 78(4) of the 2000 Act.
Paragraph 5A	Paragraph 33 of Schedule 3 to the Transfer Order.
Paragraph 6	Paragraph 58(8), (9) and (11) of Schedule 6, and the relevant entry in Schedule 7, to the 1998 Order, paragraph 20 of Schedule 1, paragraph 34 of Schedule 3, paragraph 7 of Schedule 6, paragraph 3 of Schedule 8, and the relevant entry in Part I of Schedule 9 to the Transfer Order.
Paragraph 7BA
Social Security Administration (Northern Ireland) Act 1992
Section 107	Article 56 of the 1998 Order, paragraph 5 of Schedule 4 to the Transfer Order and paragraph 7 of Schedule 6 to the Child Support, Pensions and Social Security Act (Northern Ireland) 2000.
Section 142(12)	Paragraph 45(12) of Schedule 3 to the Transfer Order.
Section 167(1)
Finance Act 1999
Section 133(1)

SCHEDULE 2 — CALCULATION OF EARNINGS FOR THE PURPOSES OF EARNINGS-RELATED CONTRIBUTIONS IN PARTICULAR CASES

Calculation of earnings

1

This Schedule contains rules for the calculation of earnings in the assessment of earnings-related contributions in particular cases.

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

2

• (1) Except where paragraph 3, 4, 5 or 6 applies, the amount of earnings comprised in any payment by way of the conferment of any beneficial interest in any asset specified in Part IV of Schedule 3, which falls to be taken into account in the computation of a person’s earnings shall be calculated or estimated at a price which that beneficial interest might reasonably be expected to fetch if sold in the open market on the day on which it is conferred.

• (2) For the purposes of sub-paragraph (1), where any asset is not quoted on a recognised stock exchange within the meaning of section 841 of the Taxes Act, it shall be assumed that, in the open market which is postulated, there is available to any prospective purchaser of the beneficial interest in the asset in question all the information which a prudent prospective purchaser might reasonably require if he were proposing to purchase if from a willing vendor by private treaty and at arm’s length.

Valuation of beneficial interest in units in a unit trust scheme

3

The amount of earnings which is comprised in any payment by way of the conferment of a beneficial interest in any units in a unit trust scheme (within the meaning of section 237 of the Financial Services and Markets Act 2000 having a published selling price and which falls to be taken into account in the calculation of a person’s earnings shall be calculated or estimated by reference to the published selling price on the day in question.

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

4

The amount of earnings which is comprised in a payment by way of the conferment of a beneficial interest in an option to acquire any asset falling within Part IV of Schedule 3 shall be calculated or estimated by reference to the amount which would be comprised in accordance with paragraph 2, or, if paragraph 3, 5 or 6 would apply in accordance with that paragraph, in a payment by way of the conferment of a beneficial interest—

• (a) in the asset which may be acquired by the exercise of the option; or

• (b) where that asset (the first asset) may be exchanged for another asset (the second asset) and the value of the beneficial interest in the second asset is greater than that in the first, in that second asset,

on the day on which the beneficial interest in the option is conferred.

Readily convertible assets

5

• (1) The amount of earnings which is comprised in—

• (a) any payment by way of the conferment of a beneficial interest in any asset falling within Part III of Schedule 3;

• (b) any payment by way of the conferment of a beneficial interest in any asset falling within Part IV of Schedule 3 which is a readily convertible asset;

• (c) any payment by way of—

• (i) a voucher, stamp or similar document falling within paragraph 12 of Part IV of that Schedule where the asset for which it is capable of being converted is a readily convertible asset;

• (ii) a non-cash voucher not falling within Part V (whether or not also falling within paragraph 12 of Part IV of that Schedule) which is capable of being exchanged for a readily convertible asset;

and which is to be taken into account in computing a person’s earnings, shall be calculated in accordance with sub-paragraph (2) to (5).

• (2) In the case of an asset falling within paragraph 1 of Part III of Schedule 3 the amount is the best estimate which can reasonably be made of the amount of general earnings in respect of the provision of the asset.

• (3) In the case of an asset falling within paragraph 2 of Part III of Schedule 3, the amount is the best estimate that can reasonably be made of the amount of general earnings in respect of the enhancement of its value.

• (4) In the case of a voucher, stamp or similar document falling within—

• (a) sub-paragraph(1)(c); or

• (b) paragraph 3 of Part III of Schedule 3,

the amount is the best estimate that can reasonably be made of the amount of general earnings in respect of the provision of any asset for which the voucher is capable of being exchanged.

• (5) In the case of an asset falling within sub-paragraph(1)(b), the amount is the best estimate that can reasonably be made of the amount of general earnings in respect of the provision of the asset.

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

6

The amount of earnings comprised in any payment by way of the conferment of a beneficial interest in—

• (a) an asset which—

• (i) falls within paragraph 9 or 10 of Part IV of Schedule 3 (payments by way of alcoholic liquor on which duty has not been paid or by way of gemstones not to be disregarded as payments in kind), and

• (ii) is not a readily convertible asset;

• (b) a voucher, stamp or similar document which falls within paragraph 12 of Part IV of that Schedule and which is not capable of being exchanged for a readily convertible asset; or

• (c) a non-cash voucher not excluded by virtue of Part 5 of that Schedule and which falls within paragraph 12 of Part IV of that Schedule (assets not to be disregarded as payments in kind) which is not capable of being exchanged for a readily convertible asset;

shall be calculated or estimated on the basis of the cost of the asset in question.

Conditional interest in shares

7

• (1) The amount of earnings comprised in any payment by way of the conferment of—

• (a) a convertible interest in securities;

• (b) a restricted interest in securities; or

• (c) an interest in convertible or restricted securities,

falling to be taken into account in computing a person’s earnings from employed earner’s employment shall be computed in the same manner, and shall be taken into account at the same time, as applies under Chapters 1 to 5 of Part 7 of ITEPA 2003, for the purpose of computing his employment income.

Convertible interest in shares

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

11

• (1) This paragraph applies if—

• (a) an earner obtained, before 6th April 1999, a right to acquire shares in a body corporate;

• (b) the earner subsequently obtained a replacement right (within the meaning given in paragraph 16A(3) of Part 9 of Schedule 3);

• (c) the replacement right is exercised;

• (d) paragraph 11A of this Schedule does not apply; and

• (e) paragraph 16A of Part 9 of Schedule 3 does not apply because sub-paragraph (4) of that paragraph is not satisfied.

• (2) If this paragraph applies, the amount of earnings comprised in any payment realised by the exercise of the replacement right shall be calculated or estimated in accordance with sub-paragraph (3).

• (3) The basis for calculating the amount of a gain realised by the exercise of the replacement right shall be the best estimate that can reasonably be made of the amount found as follows.

Interpretation of paragraphs 9, 10 and 11

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valuation of non-cash vouchers

14

• (1) The amount of earnings comprised in any payment by way of a non-cash voucher which is not otherwise disregarded by these Regulations and which falls to be taken into account in calculating an employed earner’s earnings shall be calculated on the basis set out in sub-paragraph (2).

• (1A) This paragraph is subject to paragraph 14A (valuation of non-cash vouchers provided under optional remuneration arrangements).

• (2) The basis referred to in sub-paragraph (1) is that of an amount equal to the expense incurred (“the chargeable expense”)—

• (a) by the person at whose cost the voucher and the money, goods or services, for which it is capable or being exchanged, are provided;

• (b) in, or in connection with that provision,

and any money, goods or services obtained by the employed earner or any other person in exchange for the voucher shall be disregarded.

• (3) For the purposes of sub-paragraph (2) the chargeable expense shall be reduced by any part of that which the employed earner makes good to the person incurring it.

• (4) The valuation of qualifying childcare vouchers is determined in accordance with paragraph 7 of Part 5 of Schedule 3.

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

15

• (1) The amount of earnings comprised in any payment by way of a cash voucher or a non-cash voucher provided for the benefit of two or more employed earners and which falls to be taken into account in computing the earnings of each of those earners shall be calculated or estimated on the basis set out in whichever of sub-paragraphs (2) or (3) applies.

• (2) If the respective proportion of the benefit of the voucher to which each of those earners is entitled is know at the time of the payment, the basis is that of a separate payment equal to that proportion.

• (3) In any case where the respective proportions are not know at the time of the payment, the basis is equal apportionment between all those earners.

• (4) In this paragraph—

• (a) “chargeable expense” has the same meaning, and is calculated in the same way, as in paragraph 14; and

• (b) if an employed earner makes good any part of the chargeable expense to the person incurring it, that chargeable expense in relation to that employed earner shall be reduced by that part.

SCHEDULE 3 — PAYMENTS TO BE DISREGARDED IN THE CALCULATION OF EARNINGS FOR THE PURPOSES OF EARNINGS-RELATED CONTRIBUTIONS

PART I — INTRODUCTORY

Introduction

1

• (1) This Schedule contains provisions about payments which are to be disregarded in the calculation of earnings for the purposes of earnings-related contributions.

• (2) Part II contains provisions about the treatment of payments in kind.

• (3) Part III and IV specifies payments by way of assets which are not to be disregarded by virtue of paragraph 1 of Part II.

• (4) Part V specifies non-cash vouchers which are to be disregarded by virtue of paragraph 1 of Part II.

• (5) In computing earnings there are also to be disregarded—

• (a) the pensions and pension contributions specified in Part VI;

• (b) the payments in respect of training and similar courses specified in Part VII;

• (c) the travelling, relocation and overseas expenses specified in Part VIII;

• (d) the incentives by way of securities specified in Part IX; and

• (e) the miscellaneous payments specified in Part X.

Interpretation

2

• (1) In this Schedule, unless the context otherwise requires—

• (a) a reference to a numbered Part is a reference to the Part of this Schedule which bears that number;

• (b) a reference in a Part, to a numbered paragraph is a reference to the paragraph of that Part which bears that number; and.

• (c) a reference in a paragraph to a lettered or numbered sub-paragraph is a reference to the sub-paragraph of that paragraph which bears that letter or number.

PART II — PAYMENTS IN KIND

Certain payments in kind to be disregarded

1

A payment in kind, or by way of the provision of services, board and lodging or other facilities is to be disregarded in the calculation of earnings.

Payments by way of assets not to be disregarded

2

Payments falling within paragraph 1 do not include any payment by way of—

• (a) the conferment of any beneficial interest in—

• (i) any asset mentioned in Part III or Part IV,

• (ii) any contract of long-term insurance which falls within paragraph I, III or VI of Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

• (b) a non-cash voucher not of a description mentioned in Part V or to which paragraph 4 of Part X applies.

• (2) Sub-paragraph (1)(a)(i) is subject to the qualification that an asset, which falls within either Part III or Part IV, shall nevertherless be disregarded under paragraph 1 if no liability to income tax arises by virtue of section 323 of ITEPA 2003 (long service awards).

• (3) For the purposes of sub-paragraph (1)(a)(ii), if the contract—

• (a) falls within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and Part I of that Schedule; or

• (b) is treated for the purposes of that Order as falling within Part II of that Schedule by Article 3(3) of that Order,

that contract shall be treated as a contract of long-term insurance.

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

1

A readily convertible asset within the meaning of section 702 of ITEPA 2003.

2

An asset which, in accordance with section 697 of ITEPA 2003 (PAYE: enhancing the value of an asset), would be treated, for the purposes of section 696 of that Act, as a readily convertible asset.

3

Any voucher, stamp or similar document—

• (a) whether used singularly or together with other such vouchers, stamps or documents; and

• (b) which is capable of being exchanged for an asset falling within paragraph 1 or 2.

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

Shares and stock

1

Securities.

Certain debentures and other securities for loans

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loans stocks of public and local authorities

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Warrants etc for loan stock and debentures

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Units in collective investment schemes

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

6

Options to acquire, or dispose of—

• (a) currency of the United Kingdom or any other country or territory;

• (b) gold, silver, palladium or platinum;

• (c) an asset falling within any other paragraph of this Part of this Schedule;

• (d) an option to acquire, or dispose of, an asset falling within sub-paragraph (a), (b) or (c).

Contracts for futures

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Alcoholic liquor on which duty has not been paid

9

Any alcoholic liquor, within the meaning of section 1 of the Alcoholic Liquor Duties Act 1979 in respect of which no duty has been paid under that Act.

Gemstones

10

Any gemstone, including stones such as diamond, emerald, ruby, sapphire, amethyst, jade, opal or topaz and organic gemstones such as amber or pearl, whether cut or uncut and whether or not having an industrial use.

Certificates etc. conferring rights in respect of assets

11

Certificates or other instruments which confer—

• (a) property rights in respect of any asset falling within paragraphs 1, 9 or 10;

• (b) any right to acquire, dispose of, underwrite or convert an asset, being a right to which the holder would be entitled if he held any such asset to which the certificate or instrument relates; or

• (c) a contractual right, other than an option, to acquire any such asset otherwise than by subscription.

Vouchers

12

Any voucher, stamp or similar document—

• (a) whether used singularly or together with other such vouchers, stamps or documents; and

• (b) which is capable of being exchanged for an asset falling within any other paragraph of this Part.

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

1

• (1) Subject to sub-paragraph (2), a non-cash voucher provided, to or for the benefit of the employed earner, by the employer or any other person on his behalf is to be disregarded in the calculation of an employed earner’s earnings by virtue of paragraph 1 of Part II only if it falls within any of paragraphs 2 to 9.

• (2) A non-cash voucher may also be disregarded—

• (a) by virtue of paragraph 7D of Part VIII (car fuel); ...

• (aa) by virtue of paragraph 7E of Part 8 (van fuel); or

• (b) in the circumstances specified in paragraph 4 of Part X (payments by way of incidental overnight expenses).

2

A non-cash voucher which is not treated as general earnings from employment for the purposes of section 86 of ITEPA 2003 (transport vouchers under pre-26th March arrangements).

3

A non-cash voucher exempted from liability to income tax under Chapter 4 of Part 3 by virtue of sections 266(1)(a) or 269 of ITEPA 2003 (exemptions: non-cash vouchers and credit-tokens).

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

A non-cash voucher in respect of which no liability to income tax arises by virtue of section 266(1) of ITEPA 2003 to the extent that the voucher is used to obtain anything the direct provision of which would fall within any of the following provisions of that Act—

• (a) section 246 (transport between work and home for disabled employees: general);

• (b) section 247 (provision of cars for disabled employees);

• (c) section 248 (transport home: late night working and failure of car-sharing arrangements);

• (d) section 320C (recommended medical treatment).

6

A non-cash voucher to the extent that no liability to income tax arises by virtue of any of the following sections of ITEPA 2003—

• (a) section 270 (exemption for small gifts of vouchers and tokens from third parties);

• (b) section 305 (offshore oil and gas workers: mainland transfers);

• (c) section 321 (suggestion awards);

• (d) section 323 (long service awards);

• (da) section 323A (trivial benefits provided by employers)

• (e) section 324 (small gifts from third parties).

7

• (1) A qualifying childcare voucher, where an eligible employee joined a scheme—

• (a) before 6th April 2011;

• (b) before 6th April 2011 but ceased to be employed by the employer and was subsequently re-employed by the employer and re-joined the scheme before 6th April 2011; or

• (c) before 6th April 2011 and there was a continuous period of 52 weeks ending before 6th April 2011 throughout which vouchers were not being provided for the employee under the scheme,

subject to the qualifications in sub-paragraphs (2) and (5).

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Where the chargeable expense of the voucher exceeds the exempt amount, only that amount shall be disregarded by virtue of sub-paragraph (1).

• (3) The exempt amount is the amount found by the formula—

$$ExQW.$Here—E is the sum of— £55; andthe administration costs for the qualifying childcare voucher;QW is the number of qualifying weeks—for which the earner has been employed by the secondary contributor during the tax year in which the qualifying childcare voucher is provided; andfor which no other qualifying childcare voucher has been provided by the secondary contributor.$

• (4) Where an earner has two or more employed earner's employments, the earnings from which fall to be aggregated in accordance with regulation 14 or 15, the reference to the secondary contributor in paragraph (b) of the definition of QW is a reference to the secondary contributor in respect any of those employments.

• (5) An earner is only entitled to one exempt amount even if childcare vouchers are provided in respect of more than one child.

• (6) In this paragraph “qualifying childcare voucher” means a non-cash voucher in relation to which Conditions A to C are met.

• (7) Condition A is that the voucher is provided to enable an employee to obtain care for a child who—

• (a) is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense; or

• (b) is resident with the employee and is a person in respect of whom the employee has parental responsibility.

• (8) Condition B is that the voucher can only be used to obtain qualifying child care.

• (9) Condition C is that the vouchers are provided under a scheme that is open—

• (a) to the employer’s eligible employees generally; or

• (b) generally to those at a particular location,

• subject to sub-paragraph (10).

• (10) Where the scheme under which the vouchers are provided involves—

• (a) relevant salary sacrifice arrangements; or

• (b) relevant flexible remuneration arrangements,

• Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

8

A non-cash voucher provided to or for the benefit of an employed earner in respect of employed earner’s employment by a person who is not the secondary contributor in respect of the provision of that voucher.

PART VI — PENSIONS AND PENSION CONTRIBUTIONS

Pension payments and pension contributions disregarded

1

The payments mentioned in this Part are disregarded in the calculation of earnings for the purposes of earnings-related contributions.

Personal pension contributions by employers

2

A payment—

• (a) by way of employer’s contribution towards a registered pension scheme to which section 308... of ITEPA 2003 (exemption of contributions to registered pension scheme) applies;

• (b) by way of any benefit pursuant to a registered pension scheme to which—

• (i) section 204(1) (authorised pensions and lump sums) of, and Schedule 31 (taxation of benefits under registered pension schemes) to, the Finance Act 2004 applies; or

• (ii) section 208 or 209 of that Act (unauthorised payments) applies.

Approved schemes, relevant statutory schemes, pilots’ benefit funds and schemes established by overseas governments

3

• (1) A payment by way of—

• (a) an employer’s contribution to which paragraph 2 of Schedule 33 of the Finance Act 2004 (relief for employers' contributions) applies and any benefit referable to that contribution;

• (b) an employer’s contribution to which article 15(2) of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (employers with pre-commencement entitlement to corresponding relief) applies and any benefit referable to that contribution; ...

• (ba) an employer’s contribution to a pension scheme established by a government outside the United Kingdom for the benefit of its employees or primarily for their benefit, and any benefit referable to such a contribution (whenever made);

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) benefits from a pension scheme which are referable to contributions made before 6th April 2006, provided that section 386 of ITEPA 2003 did not apply to those contributions by virtue of section 390 of that Act; or

• (e) benefits subject to the unauthorised payment charge imposed by section 208 of the Finance Act 2004 as applied to a relevant non-UK scheme by virtue of paragraph 1 of Schedule 34 to that Act.

• (2) Expressions defined in Schedule 34 to the Finance Act 2004 have the same meaning in this paragraph as they have there.

Funded unapproved retirement benefit schemes.

4

A payment by way of relevant benefits pursuant to a retirement benefits scheme which has not been approved by the Board for the purposes of Chapter I of Part XIV of the Taxes Act and attributable to payments prior to 6th April 1998.

Payments to pension previously taken into account in calculating earnings

5

A payment by way of any benefit pursuant to a retirement benefits scheme which has not been approved by the Board for the purposes of Chapter I of Part XIV of the Taxes Act and attributable to payments on or after 6th April 1998 and before 6th April 2006 which have previously been included in a person’s earnings for the purpose of the assessment of his liability for earnings-related contributions.

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

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pensions exempt from UK taxation under double taxation agreements

7

• (1) A payment to a pension scheme which is afforded relief from taxation by virtue of any of the following provisions, and any benefit referable to that payment—

• (a) Article 25(8) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (France) Order 1968;

• (b) Article 17A of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Republic of Ireland) Order 1976;

• (bb) Article 27(2) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Canada) Order 1980;

• (c) Article 28(3) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income)(Denmark) Order 1980.

• (d) Article 18 of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (The United States of America) Order 2002.

• (e) Article 17(3) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (South Africa) Order 2002;

• (f) Article 17(3) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Chile) Order 2003.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART VII — PAYMENTS IN RESPECT OF TRAINING AND SIMILAR COURSES

Payments in respect of training and similar payment disregarded

1

The training payments and vouchers mentioned in this Part are disregarded in the calculation of an employed earner’s earnings.

Work-related training

2

A payment of, or contribution towards, expenditure incurred on providing work-related training which, by virtue of sections 250 to 254 of ITEPA 2003 (exemption for work-related training), is not to be taken as general earnings of the office or employment in connection with which it is provided.

Education and training funded by employers

3

A payment in respect of expenditure which, by virtue of section 255 of ITEPA 2003 (exemption for contributions to individual learning account training), is not to be taken as general earnings of the office or employment in connection with which it is provided.

New Deal 50plus: employment grant and training credit

4

A payment to a person, as a participant in the scheme arranged under section 2(2) of the Employment and Training Act 1973 and known as New Deal 50plus, of an employment credit or a training grant under that scheme.

Retraining courses for recipients of jobseeker’s allowance

5

A payment to a person as a participant in a scheme of the kind mentioned in section 60(1) of the Welfare Reform and Pensions Act 1999 (special schemes for claimants for jobseeker’s allowances) .

Payments to Jobmatch participants

6

A payment made to a participant in a Jobmatch Scheme (including a pilot) arranged under section 2(1) of the Employment and Training Act 1973 in his capacity as such.

Vouchers provided to Jobmatch participants

7

A payment by way of the discharge of any liability by the use of a voucher given to a participant in a Jobmatch Scheme (including a pilot), arranged under section 2(1) of the Employment and Training Act 1973, in his capacity as such.

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

Travelling, relocation and incidental expenses disregarded

1

The travelling, relocation and other expenses and allowances mentioned in this Part are disregarded in the calculation of an employed earner’s earnings.

Relocation expenses

2

• (1) A payment of, or contribution towards, expenses reasonably incurred by a person in relation to a change of residence in connection with the commencement of, or an alteration in the duties of the person’s employment or the place where those duties are normally to be performed is disregarded if the conditions in sub-paragraphs (2) to (6) are met.

• (2) The first condition is that—

• (a) the payment or contribution—

• (i) is not, by virtue of section 271 of ITEPA 2003 (limited exemption of removal benefits and expenses) liable to income tax as general earnings under that Act; or

• (ii) would not have been so regarded, but is in fact disregarded by virtue of another provision of ITEPA 2003; ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The second condition is that the change of residence must result from—

• (a) the employee becoming employed by an employer;

• (b) an alteration of the duties of the employee’s employment (where his employer remains the same); or

• (c) an alteration of the place where the employee is normally to perform the duties of his employment (where both the employer and the duties which the employee is to perform remains the same).

• (4) The third condition is that the change of residence must be made wholly or mainly to allow the employee to have his residence within a reasonable daily travelling distance of—

• (a) the place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(a);

• (b) the place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(b); or

• (c) the new place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(c).

References in this sub-paragraph and sub-paragraph (5) to the place where the employee performs, or is to perform, the duties of his employment are references to the place where he normally performs, or is normally to perform, the duties of the employment.

• (5) The fourth condition is that the employee’s former residence must not be within a reasonable daily travelling distance of the place where the employee performs or is to perform the duties of the employment.

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) For the purposes of this paragraph, Chapter 7 of Part 4 of ITEPA 2003 shall be read as if sections 272 (1)(b), 272 (3)(b), 274 and 287 were omitted

Travelling expenses—general

3