The Social Security (Contributions) (Amendment No. 2) Regulations 2002

Amendment of the principal Regulations

7.—(1) Amend Part VIII of Schedule 3 (payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions: travelling, relocation and other expenses and allowances of the employment) as follows.

(2) After paragraph 7 insert—

“Qualifying amounts of relevant motoring expenditure

7A.  To the extent that it would otherwise be earnings, the qualifying amount calculated in accordance with regulation 22A(4).

Qualifying amounts of mileage allowance payment in respect of cycles

7B.—(1) To the extent that it would otherwise be earnings, the qualifying amount of a mileage allowance payment in respect of a cycle.

(2) The qualifying amount is that which would be produced by the formula in regulation 22A(4) if the value for R were the rate for the time being approved under paragraph 4(2) of Schedule 12AA to the Taxes Act in respect of a cycle.

(3) In this paragraph—

• “cycle” has the meaning given in section 192(1) of the Road Traffic Act 1988; and

• “mileage allowance payment” has the meaning given in section 197AD(2) of the Taxes Act.

Qualifying amounts of passenger payment

7C.—(1) To the extent that it would otherwise be earnings, the qualifying amount of a passenger payment.

(2) The qualifying amount is that which would be produced by the formula in regulation 22A(4) if—

(a)references to business travel were to business travel for which the employee carries a qualifying passenger; and

(b)the value for R were the rate for the time being approved for a passenger payment under paragraph 5 of Schedule 12AA to the Taxes Act.

(3) In this paragraph—

• “passenger payment” has the meaning given in section 197AE(2) of the Taxes Act(1); and

• “qualifying passenger” has the same meaning as it has in paragraph 5(3) of Schedule 12AA to the Taxes Act.

Car fuel

7D.—(1) A payment by way of the provision of car fuel in circumstances where an amount is chargeable to income tax under Schedule E, in respect of its provision, under section 158 of the Taxes Act.

(2) Subsection (3) of section 158 of the Taxes Act applies for the construction of the reference to car fuel in sub-paragraph (1) as it applies for the construction of that section.”.

(3) Amend paragraph 9 (specific and distinct expenses) as follows—

(a)renumber the existing paragraph 9 as sub-paragraph (1) of that paragraph;

(b)at the end of sub-paragraph (1) add—

• “This is subject to the following qualification.”; and

(c)after sub-paragraph (1) add—

“(2) Sub-paragraph (1) does not authorise the disregard of any amount by way of relevant motoring expenditure, within the meaning of paragraph (3) of regulation 22A, in excess of that permitted by the formula in paragraph (4) of that regulation.”