House of Commons Public Bill Committee Proceedings

Session 2013 - 14
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Other Bills before Parliament

423

SUPPLEMENT TO THE VOTES AND PROCEEDINGS

Tuesday 10 December 2013

Report Stage Proceedings

National Insurance Contributions Bill

new clauses

Reduction of secondary Class 1 contributions for certain age groups

Mr Chancellor of the Exchequer

Added  NC3

To move the following Clause:—

‘(1)
SSCBA 1992 is amended as follows.

(2)
In section 9 (calculation of secondary Class 1 contributions)—

(a)
in subsection (1) for “the secondary percentage” substitute “the relevant

percentage”, and
5
(b)
after subsection (1) insert—

“(1A)
For the purposes of subsection (1) “the relevant percentage” is—

(a)
if section 9A below applies to the earnings, the age-

related secondary percentage;

(b)
otherwise, the secondary percentage.”
10
(3)
After section 9 insert—

“9A
The age-related secondary percentage

(1)
Where a secondary Class 1 contribution is payable as mentioned in

section 6(1)(b) above, this section applies to the earnings paid in the tax

week, in respect of the employment in question, if the earner falls within
15
an age group specified in column 1 of the table in subsection (3).

(2)
For the purposes of section 9(1A)(a) above, the age-related secondary

percentage is the percentage for the earner’s age group specified in

column 2 of the table.

(3)
Here is the table—

Age group
Age-related

secondary

percentage

Under 21
0%

Report Stage Proceedings: 10 December 2013
424

National Insurance Contributions Bill, continued

(4)
The Treasury may by regulations amend the table—
25
(a)
so as to add an age group in column 1 and to specify the

percentage in column 2 for that age group;

(b)
so as to reduce (or further reduce) the percentage specified in

column 2 for an age group already specified in column 1

(whether for the whole of the age group or only part of it).
30
(5)
A percentage specified under subsection (4)(a) must be lower than the

secondary percentage.

(6)
For the purposes of this Act a person is still to be regarded as being liable

to pay a secondary Class 1 contribution even though the amount of the

contribution is £0 because the age-related secondary percentage is 0%.
35
(7)
The Treasury may by regulations provide that, in relation to an age group

specified in the table, there is to be for every tax year an upper secondary

threshold for secondary Class 1 contributions.


That threshold is to be the amount specified for that year by regulations

made by the Treasury.
40
(8)
Subsections (4) and (5) of section 5 above (which confer power to

prescribe an equivalent of a secondary threshold in relation to earners

paid otherwise than weekly), and subsection (6) of that section as it

applies for the purposes of those subsections, apply for the purposes of

an upper secondary threshold in relation to an age group as they apply for
45
the purposes of a secondary threshold.

(9)
Where—

(a)
a secondary Class 1 contribution is payable as mentioned in

section 6(1)(b) above,

(b)
the earner falls within an age group in relation to which provision
50
has been made under subsection (7), and

(c)
the earnings paid in the tax week, in respect of the employment

in question, exceed the current upper secondary threshold (or the

prescribed equivalent) in relation to the age group,


this section is not to apply to the earnings so far as they exceed that
55
threshold (or the prescribed equivalent); and for the purposes of section

9(1) above the relevant percentage in respect of the earnings so far as they

exceed that threshold (or the prescribed equivalent) is, accordingly, to be

the secondary percentage.

(10)
In subsections (7) to (9) references to an age group include a part of an
60
age group.”

(4)
In section 122(1) (interpretation of Parts 1 to 6), at the appropriate place insert—

““age-related secondary percentage” is to be construed in accordance with

section 9A(2) above;”.

Report Stage Proceedings: 10 December 2013
425

National Insurance Contributions Bill, continued

(5)
In section 176(1)(a) (parliamentary control: instruments subject to affirmative
65
procedure) after “section 4C;” insert—


“section 9A(7);”.

(6)
SSCB(NI)A 1992 is amended as follows.

(7)
In section 9 (calculation of secondary Class 1 contributions)—

(a)
in subsection (1) for “the secondary percentage” substitute “the relevant
70
percentage”, and

(b)
after subsection (1) insert—

“(1A)
For the purposes of subsection (1) “the relevant percentage” is—

(a)
if section 9A below applies to the earnings, the age-

related secondary percentage;
75
(b)
otherwise, the secondary percentage.”

(8)
After section 9 insert—

“9A
The age-related secondary percentage

(1)
Where a secondary Class 1 contribution is payable as mentioned in

section 6(1)(b) above, this section applies to the earnings paid in the tax
80
week, in respect of the employment in question, if the earner falls within

an age group specified in column 1 of the table in subsection (3).

(2)
For the purposes of section 9(1A)(a) above, the age-related secondary

percentage is the percentage for the earner’s age group specified in

column 2 of the table.
85
(3)
Here is the table—

Age group
Age-related

secondary

percentage

Under 21
0%

90
(4)
The Treasury may by regulations amend the table—

(a)
so as to add an age group in column 1 and to specify the

percentage in column 2 for that age group;

(b)
so as to reduce (or further reduce) the percentage specified in

column 2 for an age group already specified in column 1
95
(whether for the whole of the age group or only part of it).

(5)
A percentage specified under subsection (4)(a) must be lower than the

secondary percentage.

(6)
For the purposes of this Act a person is still to be regarded as being liable

to pay a secondary Class 1 contribution even though the amount of the
100
contribution is £0 because the age-related secondary percentage is 0%.

(7)
The Treasury may by regulations provide that, in relation to an age group

specified in the table, there is to be for every tax year an upper secondary

threshold for secondary Class 1 contributions.


That threshold is to be the amount specified for that year by regulations
105
made by the Treasury.

Report Stage Proceedings: 10 December 2013
426

National Insurance Contributions Bill, continued

(8)
Subsections (4) and (5) of section 5 above (which confer power to

prescribe an equivalent of a secondary threshold in relation to earners

paid otherwise than weekly), and subsection (6) of that section as it

applies for the purposes of those subsections, apply for the purposes of
110
an upper secondary threshold in relation to an age group as they apply for

the purposes of a secondary threshold.

(9)
Where—

(a)
a secondary Class 1 contribution is payable as mentioned in

section 6(1)(b) above,
115
(b)
the earner falls within an age group in relation to which provision

has been made under subsection (7), and

(c)
the earnings paid in the tax week, in respect of the employment

in question, exceed the current upper secondary threshold (or the

prescribed equivalent) in relation to the age group,
120

this section is not to apply to the earnings so far as they exceed that

threshold (or the prescribed equivalent); and for the purposes of section

9(1) above the relevant percentage in respect of the earnings so far as they

exceed that threshold (or the prescribed equivalent) is, accordingly, to be

the secondary percentage.
125
(10)
In subsections (7) to (9) references to an age group include a part of an

age group.”

(9)
In section 121(1) (interpretation of Parts 1 to 6), at the appropriate place insert—

““age-related secondary percentage” is to be construed in accordance with

section 9A(2) above;”.
130
(10)
In section 172(11A) (parliamentary control: instruments subject to affirmative

procedure) after “4C,” insert “9A(7),”.

(11)
The following come into force at the end of the period of 2 months beginning with

the day on which this Act is passed—

(a)
any power conferred on the Treasury by virtue of this section to make
135
regulations, and

(b)
the amendments made by subsections (5) and (10).

(12)
So far as not already brought into force by subsection (11), the amendments made

by this section come into force on 6 April 2015.’.

As an Amendment to Mr Chancellor of the Exchequer’s proposed New Clause

(Reduction of secondary Class 1 contributions for certain age groups) (NC3):—

Shabana Mahmood

Negatived on division  (a)


Line  138,  at end insert—

‘(13)
The Treasury shall publish a review of the level of youth unemployment as at

December 2013 and the effect on the level of youth unemployment if the

amendments made in this section were required to be brought into force on 6

April 2014.’.

Report Stage Proceedings: 10 December 2013
427

National Insurance Contributions Bill, continued

Class 4 contributions: partnerships

Mr Chancellor of the Exchequer

Added  NC4

To move the following Clause:—

‘(1)
SSCBA 1992 is amended as follows.

(2)
After section 18 insert—

“18A
Class 4 contributions: partnerships

(1)
The Treasury may by regulations—

(a)
modify the way in which liabilities for Class 4 contributions of a

partner in a firm are determined, or

(b)
otherwise modify the law relating to Class 4 contributions,


as they consider appropriate to take account of the passing or making of

a provision of the Income Tax Acts relating to firms or partners in firms.

(2)
“Firm” has the same meaning as in the Income Tax (Trading and Other

Income) Act 2005 (and includes a limited liability partnership in relation

to which section 863(1) of that Act applies); and “partner” is to be read

accordingly and includes a former partner.

(3)
Regulations under this section may have retrospective effect; but they

may not have effect before the beginning of the tax year in which they are

made.”

(3)
In section 176(1)(a) (parliamentary control: instruments subject to affirmative

procedure), after “section 18;” insert—


“section 18A;”.

(4)
SSCB(NI)A 1992 is amended as follows.

(5)
After section 18 insert—

“18A
Class 4 contributions: partnerships

(1)
The Treasury may by regulations—

(a)
modify the way in which liabilities for Class 4 contributions of a

partner in a firm are determined, or

(b)
otherwise modify the law relating to Class 4 contributions,


as they consider appropriate to take account of the passing or making of

a provision of the Income Tax Acts relating to firms or partners in firms.

(2)
“Firm” has the same meaning as in the Income Tax (Trading and Other

Income) Act 2005 (and includes a limited liability partnership in relation

to which section 863(1) of that Act applies); and “partner” is to be read

accordingly and includes a former partner.

(3)
Regulations under this section may have retrospective effect; but they

may not have effect before the beginning of the tax year in which they are

made.”

(6)
In section 172(11A) (parliamentary control: instruments subject to affirmative

procedure), after “18,” insert “18A,”.

(7)
The amendments made by this section come into force at the end of the period of

2 months beginning with the day on which this Act is passed.’.

Report Stage Proceedings: 10 December 2013
428

National Insurance Contributions Bill, continued

Limited liability partnerships

Mr Chancellor of the Exchequer

Added  NC5

To move the following Clause:—

‘(1)
SSCBA 1992 is amended as follows.

(2)
After section 4A insert—

“4AA
Limited liability partnerships

(1)
The Treasury may, for the purposes of this Act, by regulations—

(a)
provide that, in prescribed circumstances—

(i)
a person (“E”) is to be treated as employed in employed

earner’s employment by a limited liability partnership

(including where E is a member of the partnership), and

(ii)
the limited liability partnership is to be treated as the

secondary contributor in relation to any payment of

earnings to or for the benefit of E as the employed

earner;

(b)
prescribe how earnings in respect of E’s employed earner

employment with the limited liability partnership are to be

determined (including what constitutes such earnings);

(c)
provide that such earnings are to be treated as being paid to or for

the benefit of E at prescribed times.

(2)
Regulations under subsection (1) may modify the definition of

“employee” or “employer” in section 163, 171, 171ZJ or 171ZS below as

the Treasury consider appropriate to take account of any provision falling

within subsection (1)(a) to (c).

(3)
If—

(a)
a provision of the Income Tax Acts relating to limited liability

partnerships or members of limited liability partnerships is

passed or made, and

(b)
in consequence, the Treasury consider it appropriate for

provision to be made for the purpose of assimilating to any extent

the law relating to income tax and the law relating to

contributions under this Part,


the Treasury may by regulations make that provision.

(4)
The provision that may be made under subsection (3) includes provision

modifying any provision made by or under this Act.

(5)
Regulations under this section are to be made with the concurrence of the

Secretary of State.

(6)
Section 4(4) of the Limited Liability Partnerships Act 2000 does not limit

the provision that may be made by regulations under this section.”

(3)
In section 4B (power to make retrospective provision in consequence of

retrospective tax legislation), in subsection (3), after paragraph (c) insert—

“(d)
section 4AA (power to make provision in relation to limited

liability partnerships)”.

Report Stage Proceedings: 10 December 2013
429

National Insurance Contributions Bill, continued

(4)
In section 10 (Class 1A contributions: benefits in kind etc), at the end, insert—

“(11)
The Treasury may by regulations modify the law relating to Class 1A

contributions in the case of an employed earner’s employment which is

treated as existing by virtue of regulations under section 4AA.”

(5)
SSCB(NI)A 1992 is amended as follows.

(6)
After section 4A insert—

“4AA
Limited liability partnerships

(1)
The Treasury may, for the purposes of this Act, by regulations—

(a)
provide that, in prescribed circumstances—

(i)
a person (“E”) is to be treated as employed in employed

earner’s employment by a limited liability partnership

(including where E is a member of the partnership), and

(ii)
the limited liability partnership is to be treated as the

secondary contributor in relation to any payment of

earnings to or for the benefit of E as the employed

earner;

(b)
prescribe how earnings in respect of E’s employed earner

employment with the limited liability partnership are to be

determined (including what constitutes such earnings);

(c)
provide that such earnings are to be treated as being paid to or for

the benefit of E at prescribed times.

(2)
Regulations under subsection (1) may modify the definition of

“employee” or “employer” in section 159, 167, 167ZJ or 167ZS below as

the Treasury consider appropriate to take account of any provision falling

within subsection (1)(a) to (c).

(3)
If—

(a)
a provision of the Income Tax Acts relating to limited liability

partnerships or members of limited liability partnerships is

passed or made, and

(b)
in consequence, the Treasury consider it appropriate for

provision to be made for the purpose of assimilating to any extent

the law relating to income tax and the law relating to

contributions under this Part,


the Treasury may by regulations make that provision.

(4)
The provision that may be made under subsection (3) includes provision

modifying any provision made by or under this Act.

(5)
Regulations under this section are to be made with the concurrence of the

Department.

(6)
Section 4(4) of the Limited Liability Partnerships Act 2000 does not limit

the provision that may be made by regulations under this section.”

(7)
In section 4B (power to make retrospective provision in consequence of

retrospective tax legislation), in subsection (3), after paragraph (c) insert—

“(d)
section 4AA (power to make provision in relation to limited

liability partnerships)”.



© Parliamentary copyright	Revised 11 December 2013