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Social Security Bill - continued        House of Commons
PART I, DECISIONS AND APPEALS - continued
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Child support: cases of error.     44. After section 28ZB of the Child Support Act there shall be inserted the following sections-
 
 
Cases of error
Restrictions on liability in certain cases of error.     28ZC. - (1) This section applies where-
 
 
    (a) the effect of the determination, whenever made, of an appeal to a Child Support Commissioner or the court ("the relevant determination") is that the adjudicating authority's decision out of which the appeal arose was erroneous in point of law; and
 
    (b) after the date of the relevant determination a decision falls to be made in accordance with that determination (or would, apart from this section, fall to be so made)-
 
      (i) by the Secretary of State, an appeal tribunal, a Child Support Commissioner or a court with respect to an application for a maintenance assessment (made after the commencement date);
 
      (ii) by the Secretary of State as to whether to revise, under section 16, a decision (made after the commencement date) with respect to such an assessment; or
 
      (iii) by the Secretary of State on an application made under section 17 before the date of the relevant determination (but after the commencement date) for a decision with respect to such an assessment to be superseded.
      (2) In so far as the decision relates to a person's liability in respect of a period before the date of the relevant determination, it shall be made as if the adjudicating authority's decision had been found by the Commissioner or court not to have been erroneous in point of law.
 
      (3) Subsection (1)(a) shall be read as including a case where-
 
 
    (a) the effect of the relevant determination is that part or all of a purported regulation or order is invalid; and
 
    (b) the error of law made by the adjudicating authority was to act on the basis that the purported regulation or order (or the part held to be invalid) was valid.
      (4) In this section-
 
 
    "adjudicating authority" means the Secretary of State, or a child support officer;
 
    "the commencement date" means the date of the coming into force of section 44 of the Social Security Act 1997; and
 
    "the court" means the High Court, the Court of Appeal, the Court of Session, the High Court or Court of Appeal in Northern Ireland, the House of Lords or the Court of Justice of the European Community.
      (5) The date of the relevant determination shall, in prescribed cases, be determined for the purposes of this section in accordance with any regulations made for that purpose.
 
      (6) Regulations made under subsection (5) may include provision-
 
 
    (a) for a determination of a higher court to be treated as if it had been made on the date of a determination of a lower court or a Child Support Commissioner; or
 
    (b) for a determination of a lower court or a Child Support Commissioner to be treated as if it had been made on the date of a determination of a higher court.
Correction of errors and setting aside of decisions.     28ZD. - (1) Regulations may make provision with respect to-
 
 
    (a) the correction of accidental errors in any decision or record of a decision given under this Act; and
 
    (b) the setting aside of any such decision in a case where it appears just to set the decision aside on the ground that-
 
      (i) a document relating to the proceedings in which the decision was given was not sent to, or was not received at an appropriate time by, a party to the proceedings or a party's representative or was not received at an appropriate time by the body or person who gave the decision; or
 
      (ii) a party to the proceedings or a party's representative was not present at a hearing related to the proceedings.
      (2) Nothing in subsection (1) shall be construed as derogating from any power to correct errors or set aside decisions which is exercisable apart from regulations made by virtue of that subsection."
 
 
Vaccine damage payments
Vaccine damage payments: decisions superseding earlier decisions.     45. After section 3 of the Vaccine Damage Payments Act there shall be inserted the following section-
 
 
"Decisions superseding earlier decisions.     3A. - (1) Subject to subsection (2) below, any decision of the Secretary of State under section 3 above or this section, and any decision of an appeal tribunal under section 4 below, may be superseded by a decision made by the Secretary of State-
 
    (a) either within the prescribed period or in prescribed cases or circumstances; and
 
    (b) either on an application made for the purpose or on his own initiative.
      (2) In making a decision under subsection (1) above, the Secretary of State need not consider any issue that is not raised by the application or, as the case may be, did not cause him to act on his own initiative.
 
      (3) Regulations may prescribe the procedure by which a decision may be made under this section.
 
      (4) Except as provided by section 5(4) below, no payment under section 1(1) above shall be recoverable by virtue of a decision under this section.
 
      (5) In this section and sections 4 and 8 below "appeal tribunal" means an appeal tribunal constituted under Chapter I of Part I of the Social Security Act 1997."
 
Vaccine damage payments: appeals to appeal tribunals.     46. For section 4 of the Vaccine Damage Payments Act there shall be substituted the following section-
 
 
"Appeals to appeal tribunals.     4. - (1) The claimant may appeal to an appeal tribunal against any decision of the Secretary of State under section 3 or 3A above.
 
    (2) Regulations may make provision as to the manner in which, and the time within which, appeals are to be brought."
 
Vaccine damage payments: correction of errors etc.     47. After section 7 of the Vaccine Damage Payments Act there shall be inserted the following section-
 
 
"Correction of errors and setting aside of decisions.     7A. - (1) Regulations may make provision with respect to-
 
    (a) the correction of accidental errors in any decision or record of a decision under section 3, 3A or 4 of this Act; and
 
    (b) the setting aside of any such decision in a case where it appears just to set the decision aside on the ground that-
 
      (i) a document relating to the proceedings in which the decision was given was not sent to, or was not received at an appropriate time by, a party to the proceedings or a party's representative or was not received at an appropriate time by the body or person who gave the decision; or
 
      (ii) a party to the proceedings or a party's representative was not present at a hearing related to the proceedings.
      (2) Nothing in subsection (1) shall be construed as derogating from any power to correct errors or set aside decisions which is exercisable apart from regulations made by virtue of that subsection."
 
  PART II
  CONTRIBUTIONS
 
Amendments of Contributions and Benefits Act
Payments on account of directors' contributions.     48. After subsection (3) of section 3 of the Contributions and Benefits Act ("earnings" and "earner") there shall be inserted the following subsections-
 
 
    "(4) Subsection (5) below applies to regulations made for the purposes of subsection (2) above which make special provision with respect to the earnings periods of directors and former directors of companies.
 
      (5) Regulations to which this subsection applies may make provision-
 
 
    (a) for enabling companies, and directors and former directors of companies, to pay on account of any earnings-related contributions that may become payable by them such amounts as would be payable by way of such contributions if the special provision had not been made; and
 
    (b) for requiring any payments made in accordance with the regulations to be treated, for prescribed purposes, as if they were the contributions on account of which they were made."
Payments treated as remuneration and earnings.     49. - (1) In subsection (4) of section 4 of the Contributions and Benefits Act (payments treated as remuneration and earnings)-
 
 
    (a) after the words "sum paid" there shall be inserted the words "(or treated as paid)"; and
 
    (b) the words "otherwise than by virtue of subsection (4) of that section" shall cease to have effect.
      (2) Subsection (1) above shall have effect in relation to any undertaking given on or after 10th July 1997.
 
Class 1A contributions.     50. In subsection (2) of section 10 of the Contributions and Benefits Act (Class 1A contributions), for paragraph (b) there shall be substituted the following paragraph-
 
 
    "(b) if paragraph (a) above does not apply, the person who, if the benefit in respect of which the Class 1A contribution is payable were earnings in respect of which Class 1 contributions would be payable, would be liable to pay the secondary Class 1 contribution."
Class 1B contributions.     51. After section 10 of the Contributions and Benefits Act there shall be inserted the following section-
 
 

"Class 1B contributions
Class 1B contributions.     10A. - (1) Where for any tax year a person is accountable to the Inland Revenue in respect of income tax on emoluments of his employees in accordance with a PAYE settlement agreement, a Class 1B contribution shall be payable by him for that tax year in accordance with this section.
 
      (2) The Class 1B contribution referred to in subsection (1) above is payable in respect of-
 
 
    (a) the amount of any of the emoluments included in the PAYE settlement agreement which are chargeable emoluments; and
 
    (b) the total amount of income tax in respect of which the person is accountable for the tax year in accordance with the PAYE settlement agreement.
      (3) The amount of the Class 1B contribution referred to in subsection (1) above shall be the Class 1B percentage of the aggregate of the amounts mentioned in paragraphs (a) and (b) of subsection (2) above.
 
      (4) Emoluments are chargeable emoluments for the purposes of subsection (2) above if, apart from section 6(2A) or 10(8A) above, the person accountable in accordance with the PAYE settlement agreement would be liable or entitled to pay secondary Class 1 contributions or Class 1A contributions in respect of them.
 
      (5) Where-
 
 
    (a) the PAYE settlement agreement was entered into after the beginning of the tax year; and
 
    (b) Class 1 contributions were due in respect of any emoluments before it was entered into,
  those emoluments shall not be taken to be included in the PAYE settlement agreement.
 
      (6) For the purposes of subsection (3) above the Class 1B percentage shall be 10 per cent, but the percentage is subject to alteration under section 143A of the Administration Act.
 
      (7) Regulations may provide for persons to be excepted in prescribed circumstances from liability to pay Class 1B contributions."
 
Contributions paid in error.     52. After section 19 of the Contributions and Benefits Act there shall be inserted the following section-
 
 
"Class 1, 1A or 1B contributions paid in error.     19A. - (1) This section applies where-
 
    (a) payments by way of Class 1, Class 1A or Class 1B contributions are made in respect of earnings paid to or for the benefit of an earner (or in respect of a benefit made available to an earner) in a period falling in 1998-99 or a subsequent tax year; and
 
    (b) because the earner is not an employed earner at any time during that period, the payments are made in error.
      (2) After the end of the tax year following that mentioned in subsection (1) above the earner shall, except in such circumstances as may be prescribed, be treated for all purposes relating to-
 
 
    (a) contributions and contributory benefits; and
 
    (b) statutory sick pay and statutory maternity pay,
  as if he had been an employed earner throughout the period so mentioned."
 
Contributions returns.     53. - (1) In sub-paragraph (3) of paragraph 7 of Schedule 1 to the Contributions and Benefits Act (supplementary provisions relating to contributions)-
 
 
    (a) for the words "is liable to" there shall be substituted the words "has been required to pay"; and
 
    (a) for the words "be liable to" there shall be substituted the words "be required to pay".
      (2) After that paragraph there shall be inserted the following paragraph-
 
 
"7A. - (1) This paragraph applies where paragraph 7 above applies; and in this paragraph "contributions return" has the same meaning as in that paragraph.
 
      (2) Without prejudice to paragraph 7(2) above or to the powers of the Inland Revenue to penalise omissions or errors in returns, regulations may provide for the Secretary of State to impose penalties in respect of a person who, in making a contributions return, fraudulently or negligently-
 
 
    (a) fails to provide any information or computation that he is required to provide; or
 
    (b) provides any such information or computation that is incorrect.
      (3) Regulations under sub-paragraph (2) above shall-
 
 
    (a) prescribe the rates of penalty, or provide for how they are to be ascertained;
 
    (b) provide for the penalty to be imposed by the Secretary of State within six years after the date on which the penalty is incurred;
 
    (c) provide for determining the date on which, for the purposes of paragraph (b) above, the penalty is incurred;
 
    (d) prescribe the means by which the penalty is to be enforced; and
 
    (e) provide for enabling the Secretary of State, in his discretion, to mitigate or to remit the penalty, or to stay or to compound any proceedings for it."
Collection of contributions by Secretary of State.     54. After paragraph 7A of Schedule 1 to the Contributions and Benefits Act (supplementary provisions relating to contributions) there shall be inserted the following paragraph-
 
 

"Collection of contributions by Secretary of State
 7B. - (1) Regulations may provide that, in such cases or circumstances as may be prescribed-
 
 
    (a) contributions payable under Part I of this Act shall be paid to the Secretary of State (and not to the Inland Revenue); and
 
    (b) the Secretary of State shall be responsible for the collection of such contributions, and generally for the relevant administration.
      (2) Regulations under this paragraph may, in particular-
 
 
    (a) provide for returns to be made to the Secretary of State by such date as may be prescribed;
 
    (b) prescribe the form in which returns are to be made, or provide for returns to be made in such form as the Secretary of State may approve;
 
    (c) prescribe the manner in which contributions are to be paid, or provide for contributions to be paid in such manner as the Secretary of State may approve;
 
    (d) prescribe the due date for the payment of contributions;
 
    (e) provide for interest to be charged on contributions that are not paid by the due date, and for enabling such interest to be remitted or repaid;
 
    (f) provide for interest to be paid on contributions that fall to be repaid;
 
    (g) provide for determining the date from which interest to be charged or paid pursuant to regulations under paragraph (e) or (f) above is to be calculated;
 
    (h) provide for penalties to be imposed in respect of a person who-
 
      (i) fails to submit, within the time allowed, a return required to be made in accordance with regulations under paragraph (a) above;
 
      (ii) in making such a return, fraudulently or negligently fails to provide any information or computation that he is required to provide;
 
      (iii) in making such a return, fraudulently or negligently provides any incorrect information or computation; or
 
      (iv) fails to pay Class 2 contributions by the due date.
      (3) Regulations under sub-paragraph (2)(e) above shall not require the payment of interest on sums due in respect of contributions where-
 
 
    (a) a decision relating to those contributions falls to be made under section 9, 10, 11, 13, 15 or 16 of the Social Security Act 1997, and has not yet been made; and
 
    (b) the decision will affect a person's liability for, or the amount of, any such interest.
      (4) Regulations under sub-paragraph (2)(h) above shall-
 
 
    (a) prescribe the rates of penalty, or provide for how they are to be ascertained;
 
    (b) provide for the penalty to be imposed by the Secretary of State-
 
      (i) within six years after the date on which the penalty is incurred; or
 
      (ii) where the amount of the penalty is to be ascertained by reference to the amount of any contributions payable, at any later time within three years after the final determination of the amount of those contributions;
 
    (c) provide for determining the date on which, for the purposes of paragraph (b) above, the penalty is incurred;
 
    (d) prescribe the means by which the penalty is to be enforced; and
 
    (e) provide for enabling the Secretary of State, in his discretion, to mitigate or to remit the penalty, or to stay or to compound any proceedings for it.
      (5) Section 12 above shall not apply in relation to Class 2 contributions in respect of which the Secretary of State charges interest or imposes a penalty pursuant to regulations under paragraph (e) or (h) of sub-paragraph (2) above.
 
      (6) Interest or penalties may be charged by virtue of regulations under this paragraph in respect of a period before the passing of this Act, but only to the extent that interest or penalties would have been chargeable if the contributions in question had been recoverable, in respect of that period, by virtue of regulations under paragraph 6 above.
 
      (7) Any reference to contributions in sub-paragraph (1) above shall be construed as including a reference to any interest or penalty payable, in respect of contributions, by virtue of regulations under paragraph (e) or (h) of sub-paragraph (2) above.
 
      (8) The rate of interest applicable for any purpose of this paragraph shall be the rate from time to time prescribed under section 178 of the Finance Act 1989 for the corresponding purpose of paragraph 6 above."
 
Interest and penalties chargeable concurrently with Inland Revenue.     55. After paragraph 7B of Schedule 1 to the Contributions and Benefits Act there shall be inserted the following paragraph-
 
 

"Interest and penalties chargeable concurrently with Inland Revenue
 7C. - (1) Any interest or penalty chargeable by the Inland Revenue by virtue of regulations under paragraph 6 or 7 above may also be charged by the Secretary of State.
 
      (2) To the extent that any interest or penalty is recovered by the Secretary of State by virtue of sub-paragraph (1) above, or by virtue of regulations under paragraph 7B above, it shall not be recoverable by the Inland Revenue by virtue of regulations under paragraph 6 or 7 above; and vice versa.
 
      (3) To the extent that any penalty is recovered by the Secretary of State by virtue of regulations under paragraph 7A above, it shall not be recoverable by the Inland Revenue by virtue of regulations under paragraph 7 above; and vice versa."
 
Levy of Class 4 contributions with income tax.     56. - (1) Schedule 2 to the Contributions and Benefits Act (levy of Class 4 contributions with income tax) and Schedule 2 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland) shall each be amended as follows.
 
      (2) In paragraph 2, for the words from "subject to", in the second place where they occur, to the end there shall be substituted the words"subject to deduction for any allowance-
 
 
    (a) the amount of which falls to be given by way of discharge or repayment of income tax under section 141 of the Act of 1990; and
 
    (b) which arises from activities of any relevant trade, profession or vocation."
      (3) In paragraph 3, sub-paragraph (1)(b) shall cease to have effect.
 
      (4) In sub-paragraph (2) of paragraph 4, for the words "may either be charged" to the end there shall be substituted the words "shall be charged on him separately".
 
      (5) In sub-paragraph (1) of paragraph 6-
 
 
    (a) for the words from "Sections 86" to "fault)" there shall be substituted the words "Section 86 of the Taxes Management Act 1970 (interest on overdue tax)";
 
    (b) for the words "as they apply" there shall be substituted the words "as it applies".
      (6) In sub-paragraph (2) of that paragraph-
 
 
    (a) the words "or 88" shall cease to have effect;
 
    (b) for the words "either of those sections on tax" there shall be substituted the words "that section on income tax".
 
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Prepared 10 July 1997