The Social Security (Contributions and Credits) (Miscellaneous Amendments) Regulations (Northern Ireland) 1999

1

Subject to the provisions of paragraphs (3) and (4) of this regulation, earnings-related contributions shall be calculated in accordance with the following provisions of this paragraph—

a

primary and secondary Class 1 contributions under section 622 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (liability for Class 1 contributions) and any primary and secondary Class 1 contributions at the normal rate and at the contracted-out rate shall each be calculated separately; and

b

as regards the calculation referred to in sub-paragraph (a) of this paragraph—

i

primary and secondary Class 1 contributions shall be calculated to the nearest £0.01 and any amount of £0.005 or less shall be disregarded;

ii

earnings which in the relevant earnings period exceed the current lower earnings limit by £0£01, but not by more than £0.10, shall be treated as having exceeded that limit by £0.10.

zj

a payment—

i

to which section 59527 of the Income and Corporation Taxes Act 1988 (charge to tax in respect of certain sums paid by an employer etc.) does not apply by virtue of section 596(1) or (2)(b)28 of that Act (exceptions from section 595);

ii

to a pilots' benefit fund under section 60729 of the Income and Corporation Taxes Act 1988 (pilots' benefit fund);

iii

to which section 608 of the Income and Corporation Taxes Act 1988 (superannuation funds approved before 6th April 1980) applies;

iv

by way of any benefit pursuant to a scheme or fund falling within head (i), (ii) or (iii) of this sub-paragraph;

zk

a payment by way of relevant benefits pursuant to a retirement benefits scheme which has not been approved by the Board of Inland Revenue for the purposes of Chapter I of Part XIV of the Income and Corporation Taxes Act 1988 (retirement benefit schemes) and attributable to payments prior to 6th April 1998; and for the purposes of this sub-paragraph “relevant benefits” has the meaning assigned to it in section 612 of the Income and Corporation Taxes Act 1988;

zl

a payment by way of any benefit pursuant to a retirement benefits scheme which has not been approved by the Board of Inland Revenue for the purposes of Chapter I of Part XIV of the Income and Corporation Taxes Act 1988 and attributable to payments on, or after, 6th April 1998 which have previously been included in a person’s earnings for the purposes of his assessment of earnings-related contributions;

zm

a payment made in respect of a scheme which is bona fide established for the sole purpose of providing relevant benefits, where at the time of the payment—

i

an application for approval of the scheme has been made to the Board of Inland Revenue in accordance with section 60430 of the Income and Corporation Taxes Act 1988 (application for approval of a scheme);

ii

that application has not been rejected;

iii

the payment represents contributions in respect of an employed earner’s earnings not in excess of the permitted maximum in force at the time it is made;

iv

the terms of the scheme do not permit any pension payable under it, in whole or in part, to be surrendered, commuted or assigned except in so far as to allow an employed earner on retirement to obtain, by commutation of his pension, a lump sum or sums not exceeding in all three-eightieths of his final remuneration for each year of his service up to a maximum of 40;

v

where the scheme is connected with another scheme or schemes each of which is an approved scheme, the amount payable by way of pension or commuted pension under the scheme will not, when aggregated with any amount payable by way of pension or commuted pension under the other scheme or schemes, exceed the relevant amount, and

vi

in the case of a small self-administered scheme, the provisions of regulation 9 of the Retirement Benefits Schemes (Restriction on Discretion to Approve) (Small Self-administered Schemes) Regulations 199131 (provisions as to pensioneer trustees) have been satisfied,

but this sub-paragraph shall not apply to a small self-administered scheme to which the provisions of regulation 3 of those Regulations (restrictions on the Board’s discretion) apply;

zn

payment to a pension scheme which is afforded relief from taxation by virtue of—

i

Article 25(8) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (France) Order 196832;

ii

Article 17A of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Republic of Ireland) Order 197633 (pension scheme contributions); and for the purposes of this head that Article shall be read as if “or is being considered for approval” were omitted;

iii

Article 28(3) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Denmark) Order 198034 (miscellaneous rules).

12

For the purposes of paragraph (1)(zm) of this regulation—

a

“relevant benefits” has the meaning assigned to it in section 612 of the Income and Corporation Taxes Act 1988;

b

“permitted maximum” shall be the amount for the time being specified in an order made under section 590C(6)36 of the Income and Corporation Taxes Act 1988 (earnings cap);

c

whether or not a scheme is connected with another scheme or schemes shall be determined in accordance with the provisions of section 590A(2) to (4) of the Income and Corporation Taxes Act 1988 (section 590: supplementary provisions);

d

“relevant amount”, in the case of a pension which is not a commuted pension, shall be determined in accordance with the provisions of section 590B(3) and (7) to (11)37 of the Income and Corporation Taxes Act 1988 (section 590: further supplementary provisions) and, in the case of a pension which is a commuted pension, in accordance with the provisions of section 590B(4) and (7) to (11) of that Act;

e

“small self-administered scheme” has the meaning assigned to it in regulation 2(1) of the Retirement Benefits Schemes (Restriction on Discretion to Approve) (Small Self-administered Schemes) Regulations 1991.

d

any amount of primary Class 1 contributions reduced in accordance with section 37(1) and (1A) of the Pension Schemes (Northern Ireland) Act 1993 (reduced rates of Class 1 contributions) in respect of COSRS employment as specified in head (i), (ii) or (iii) of this sub-paragraph—

i

where the amount paid at the contracted-out rate is equal to or exceeds 53 times the amount payable on earnings at the upper earnings limit for that year, the amount paid at the normal rate in excess of 53 times the amount, calculated at the primary percentage specified in section 8(2) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (calculation of primary Class 1 contributions), payable on earnings at the lower earnings limit for that year and the amount paid at the contracted-out rate if any;

ii

where the amount paid at the contracted-out rate is less than 53 times the amount payable on earnings at the upper earnings limit for that year, the amount paid at the normal rate;

iii

where no amount has been paid at the contracted-out rate, the amount paid at the normal rate;

e

any amount of primary Class 1 contributions reduced in accordance with section 38A(1) and (2) of the Pension Schemes (Northern Ireland) Act 1993 (reduced rates of Class 1 contributions, and rebates) in respect of COMPS employment as specified in head (i), (ii) or (iii) of this sub-paragraph—

i

where the amount paid at the contracted-out rate is equal to or exceeds 53 times the amount payable on earnings at the upper earnings limit for that year, the amount paid at the normal rate in excess of 53 times the amount, calculated at the primary percentage specified in section 8(2) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, payable on earnings at the lower earnings limit for that year and the amount paid at the contracted-out rate if any;

ii

where the amount paid at the contracted-out rate is less than 53 times the amount payable on earnings at the upper earnings limit for that year, the amount paid at the normal rate;

iii

where no amount has been paid at the contracted-out rate, the amount paid at the normal rate.

1

Subject to the provisions of paragraph (2) of this regulation, where in respect of earnings paid in any year of assessment an earner has or, but for the provisions of regulation 49 of these Regulations, would have paid Class 1 contributions and those earnings are chargeable to income tax under Schedule D, he shall be excepted from liability to pay contributions under section 15(1), (2) and (5) of the Social Security Contributions and Benefits (Northern Ireland) Act 199243 (Class 4 contributions recoverable under the Income Tax Acts) on so much of his profits or gains for that year of assessment as exceed the smaller of the 2 money sums specified in section 15(3)44 of that Act and do not exceed the greater of those 2 money sums and equal—

a

in the case of an earner who has or, but for the said provisions, would have paid Class 1 contributions at the normal rate, the value of Class 1 contributions so paid or which, but for the said provisions, would have been paid, multiplied by 100 and divided by the figure of the primary percentage;

b

in the case of an earner who has or, but for the said provisions, would have paid Class 1 contributions at the reduced rate, the value of the Class 1 contributions so paid or which, but for the said provisions, would have been paid, multiplied by 100 and divided by the figure of the reduced rate;

c

in the case of an earner who has or, but for the said provisions, would have paid Class 1 contributions at the contracted-out rate, the value of the Class 1 contributions so paid or which, but for the said provisions, would have been paid, multiplied by 100 and divided by the figure of the contracted-out rate.