Child Support, Pensions and Social Security Bill

Child Support, Pensions and Social Security Bill - continued	House of Commons

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	PART IV
	NATIONAL INSURANCE CONTRIBUTIONS
Contributions in respect of benefits in kind: Great Britain.	69. - (1) In section 1(2)(b) of the Social Security Contributions and Benefits Act 1992 (Class 1A contributions), the words "in respect of cars made available for private use and car fuel" shall be omitted.
	(2) For section 10 of that Act (Class 1A contributions) there shall be substituted-
Class 1A contributions: benefits in kind etc.	10. - (1) Where-
	(a) for any tax year an earner is chargeable to income tax under Schedule E on an amount which for the purposes of the Income Tax Acts is or falls to be treated as an emolument received by him from any employment ("the relevant employment"),
	(b) the relevant employment is both employed earner's employment and employment to which Chapter II of Part V of the 1988 Act (employment as a director or with annual emoluments of more than £8,500) applies, and
	(c) the whole or a part of the emolument falls, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner,
	a Class 1A contribution shall be payable for that tax year, in accordance with this section, in respect of that earner and so much of the emolument as falls to be so left out of account.
	(2) Subject to section 10ZA below, a Class 1A contribution for any tax year shall be payable by-
	(a) the person who is liable to pay the secondary Class 1 contribution relating to the last (or only) relevant payment of earnings in that tax year in relation to which there is a liability to pay such a Class 1 contribution; or
	(b) if paragraph (a) above does not apply, the person who, if the emolument 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.
	(3) In subsection (2) above "relevant payment of earnings" means a payment which for the purposes of Class 1 contributions is a payment of earnings made to or for the benefit of the earner in respect of the relevant employment.
	(4) The amount of the Class 1A contribution in respect of any emolument shall be the Class 1A percentage of so much of it as falls to be left out of account as mentioned in subsection (1)(c) above.
	(5) In subsection (4) above "the Class 1A percentage" means a percentage rate equal to the percentage rate specified as the secondary percentage in section 9(2) above for the tax year in question.
	(6) No Class 1A contribution shall be payable for any tax year in respect of so much of any emolument as is taken for the purposes of the making of Class 1B contributions for that year to be included in a PAYE settlement agreement.
	(7) For the purposes of this section-
	(a) the amounts which for the purposes of the Income Tax Acts are or fall to be treated as emoluments received by an earner from any employment shall be determined (subject to paragraph (b) below) disregarding sections 198, 201, 201AA and 332(3) of the 1988 Act (deductions for expenses etc.); but
	(b) where an amount which is deductible in respect of any matter under any of those sections is at least equal to the whole of any corresponding amount which (but for this paragraph) would fall by reference to that matter to be included in those emoluments, the whole of the corresponding amount shall be treated as not so included.
	(8) The Treasury may by regulations-
	(a) modify the effect of subsection (7) above by adding any enactment contained in the Income Tax Acts to the list of sections of the 1988 Act contained in paragraph (a) of that subsection; or
	(b) make such amendments of subsection (7) above as appear to them to be necessary or expedient in consequence of any alteration of the provisions of the Income Tax Acts relating to the charge to tax under Schedule E.
	(9) The Treasury may by regulations provide-
	(a) for Class 1A contributions not to be payable, in prescribed circumstances, by prescribed persons or in respect of prescribed persons or emoluments;
	(b) for reducing Class 1A contributions in prescribed circumstances.
	(10) In this section "the 1988 Act" means the Income and Corporation Taxes Act 1988.
	(3) For subsection (6) of section 4 of that Act (power to treat emoluments in respect of share acquisitions etc. as earnings) there shall be substituted-
	(6) Regulations may make provision for the purposes of this Part-
	(a) for treating any amount on which an employed earner is chargeable to income tax under Schedule E as remuneration derived from the earner's employment; and
	(b) for treating any amount which in accordance with regulations under paragraph (a) above constitutes remuneration as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of his employment.
	(4) In paragraph 5(b) of Schedule 1 to that Act (power to modify section 10 for cases where a car is made available by reason of more than one employment), for "a car is made available" there shall be substituted "something is provided or made available".
	(5) In section 120(4) of the Social Security Administration Act 1992 (proof of previous offences relating to Class 1A contributions), for "car" there shall be substituted "amount".
	(6) In section 162(5)(c) of that Act (appropriate national health service allocation of Class 1A contributions), for "cash equivalents of the benefits of the cars and car fuel" there shall be substituted "emoluments".
	(7) This section shall have effect in relation to the tax year beginning with 6th April 2000 and subsequent tax years.
	(8) Regulations made by statutory instrument under any power conferred by virtue of this section may be made so as to have retrospective effect in relation to any time in the tax year in which they are made (including, in the case of regulations made in the tax year in which this Act is passed, any time in that tax year before the passing of this Act).
Third party providers of benefits in kind: Great Britain.	70. - (1) After section 10 of the Social Security Contributions and Benefits Act 1992 there shall be inserted-
Liability of third party provider of benefits in kind.	10ZA. - (1) This section applies, where-
	(a) a Class 1A contribution is payable for any tax year in respect of the whole or any part of an emolument received by an earner;
	(b) the emolument, in so far as it is one in respect of which such a contribution is payable, consists in a benefit provided for the earner or a member of his family or household;
	(c) the person providing the benefit is a person other than the person ("the relevant employer") by whom, but for this section, the Class 1A contribution would be payable in accordance with section 10(2) above; and
	(d) the provision of the benefit by that other person has not been arranged or facilitated by the relevant employer.
	(2) For the purposes of this Act if-
	(a) the person providing the benefit pays an amount for the purpose of discharging any liability of the earner to income tax for any tax year, and
	(b) the income tax in question is tax chargeable in respect of the provision of the benefit or of the making of the payment itself,
	the amount of the payment shall be treated as if it were an emolument consisting in the provision of a benefit to the earner in that tax year and falling, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner.
	(3) Subject to subsection (4) below, the liability to pay any Class 1A contribution in respect of-
	(a) the benefit provided to the earner, and
	(b) any further benefit treated as so provided in accordance with subsection (2) above,
	shall fall on the person providing the benefit, instead of on the relevant employer.
	(4) Subsection (3) above applies in the case of a Class 1A contribution for the tax year beginning with 6th April 2000 only if the person providing the benefit in question gives notice in writing to the Inland Revenue on or before 6th July 2001 that he is a person who provides benefits in respect of which a liability to Class 1A contributions is capable of falling by virtue of this section on a person other than the relevant employer.
	(5) The Treasury may by regulations make provision specifying the circumstances in which a person is or is not to be treated for the purposes of this Act as having arranged or facilitated the provision of any benefit.
	(6) In this section references to a member of a person's family or household shall be construed in accordance with section 168(4) of the Income and Corporation Taxes Act 1988.
Non-cash vouchers provided by third parties.	10ZB. - (1) In section 10ZA above references to the provision of a benefit include references to the provision of a non-cash voucher.
	(2) Where-
	(a) a non-cash voucher is received by any person from employment to which Chapter II of Part V of the Income and Corporation Taxes Act 1988 does not apply, and
	(b) the case would be one in which the conditions in section 10ZA(1)(a) to (d) above would be satisfied in relation to the provision of that voucher if that Chapter did apply to that employment,
	sections 10 and 10ZA above shall have effect in relation to the provision of that voucher, and to any such payment in respect of the provision of that voucher as is mentioned in section 10ZA(2) above, as if that employment were employment to which that Chapter applied.
	(3) In this section "non-cash voucher" has the same meaning as in section 141 of the Income and Corporation Taxes Act 1988.
	(2) After subsection (3) of section 110ZA of the Social Security Administration Act 1992 (premises liable to inspection) there shall be inserted-
	(3A) The references in subsection (3) above to a trade or business include references to the administration of any scheme for the provision of benefits to persons by reason of their employment.
	(3) Subsection (1) shall have effect in relation to the tax year beginning with 6th April 2000 and subsequent tax years.
	(4) Regulations made by virtue of this section under section 10ZA(5) of the Social Security Contributions and Benefits Act 1992 may be made so as to have retrospective effect in relation to any time in the tax year in which they are made (including, in the case of regulations made in the tax year in which this Act is passed, any time in that tax year before the passing of this Act).
	71. - (1) Schedule 1 to the Social Security Contributions and Benefits Act 1992 (supplementary provisions relating to contributions) shall be amended in accordance with subsections (2) to (5) below.
	(2) In paragraph 7(2)(b) (application of sections 100 to 100D and 102 to 104 of the Taxes Management Act 1970 in relation to certain penalties), for "104" there shall be substituted "105".
	(3) For sub-paragraph (2)(e) of paragraph 7B (power to provide for interest to be charged on late payment in the case of payment outside the PAYE system) there shall be substituted-
	(e) require interest to be paid on contributions that are not paid by the due date, and provide for determining the date from which such interest is to be calculated;.
	(4) After sub-paragraph (5) of that paragraph there shall be inserted-
	(5A) Regulations under this paragraph may, in relation to any penalty imposed by such regulations, make provision applying (with or without modifications) any enactment applying for the purposes of income tax that is contained in Part X of the Taxes Management Act 1970 (penalties).
	(5) After that paragraph there shall be inserted-
	7BA. The Inland Revenue may by regulations provide for amounts in respect of contributions or interest that fall to be paid or repaid in accordance with any regulations under this Schedule to be set off, or to be capable of being set off, in prescribed circumstances and to the prescribed extent, against any such liabilities under regulations under this Schedule of the person entitled to the payment or repayment as may be prescribed.
	(6) In section 8(1) of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (decisions to be made by an Inland Revenue officer and appealable under section 11)-
	(a) paragraph (j) (interest under regulations made by virtue of paragraph 7B(2)(e) of Schedule 1 to the Social Security Contributions and Benefits Act 1992) shall cease to have effect; and
	(b) in paragraph (l), for "paragraphs (j) and (k)" there shall be substituted "paragraph (k)", and the words "amount of interest or" shall be omitted.
	(7) Subsection (6) has effect in relation to interest accruing on sums becoming due in respect of the tax year beginning with 6th April 2000 or any subsequent tax year.
Contributions in respect of benefits in kind: Northern Ireland.	72. - (1) In section 1(2)(b) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (Class 1A contributions), the words "in respect of cars made available for private use and car fuel" shall be omitted.
	(2) For section 10 of that Act (Class 1A contributions) there shall be substituted-
Class 1A contributions: benefits in kind etc.	10. - (1) Where-
	(a) for any tax year an earner is chargeable to income tax under Schedule E on an amount which for the purposes of the Income Tax Acts is or falls to be treated as an emolument received by him from any employment ("the relevant employment"),
	(b) the relevant employment is both employed earner's employment and employment to which Chapter II of Part V of the 1988 Act (employment as a director or with annual emoluments of more than £8,500) applies, and
	(c) the whole or a part of the emolument falls, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner,
	a Class 1A contribution shall be payable for that tax year, in accordance with this section, in respect of that earner and so much of the emolument as falls to be so left out of account.
	(2) Subject to section 10ZA below, a Class 1A contribution for any tax year shall be payable by-
	(a) the person who is liable to pay the secondary Class 1 contribution relating to the last (or only) relevant payment of earnings in that tax year in relation to which there is a liability to pay such a Class 1 contribution; or
	(b) if paragraph (a) above does not apply, the person who, if the emolument 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.
	(3) In subsection (2) above "relevant payment of earnings" means a payment which for the purposes of Class 1 contributions is a payment of earnings made to or for the benefit of the earner in respect of the relevant employment.
	(4) The amount of the Class 1A contribution in respect of any emolument shall be the Class 1A percentage of so much of it as falls to be left out of account as mentioned in subsection (1)(c) above.
	(5) In subsection (4) above "the Class 1A percentage" means a percentage rate equal to the percentage rate specified as the secondary percentage in section 9(2) above for the tax year in question.
	(6) No Class 1A contribution shall be payable for any tax year in respect of so much of any emolument as is taken for the purposes of the making of Class 1B contributions for that year to be included in a PAYE settlement agreement.
	(7) For the purposes of this section-
	(a) the amounts which for the purposes of the Income Tax Acts are or fall to be treated as emoluments received by an earner from any employment shall be determined (subject to paragraph (b) below) disregarding sections 198, 201, 201AA and 332(3) of the 1988 Act (deductions for expenses etc.); but
	(b) where an amount which is deductible in respect of any matter under any of those sections is at least equal to the whole of any corresponding amount which (but for this paragraph) would fall by reference to that matter to be included in those emoluments, the whole of the corresponding amount shall be treated as not so included.
	(8) The Treasury may by regulations-
	(a) modify the effect of subsection (7) above by adding any enactment contained in the Income Tax Acts to the list of sections of the 1988 Act contained in paragraph (a) of that subsection; or
	(b) make such amendments of subsection (7) above as appear to them to be necessary or expedient in consequence of any alteration of the provisions of the Income Tax Acts relating to the charge to tax under Schedule E.
	(9) The Treasury may by regulations provide-
	(a) for Class 1A contributions not to be payable, in prescribed circumstances, by prescribed persons or in respect of prescribed persons or emoluments;
	(b) for reducing Class 1A contributions in prescribed circumstances.
	(10) In this section "the 1988 Act" means the Income and Corporation Taxes Act 1988.
	(3) For subsection (6) of section 4 of that Act (power to treat emoluments in respect of share acquisitions etc. as earnings) there shall be substituted-
	(6) Regulations may make provision for the purposes of this Part-
	(a) for treating any amount on which an employed earner is chargeable to income tax under Schedule E as remuneration derived from the earner's employment; and
	(b) for treating any amount which in accordance with regulations under paragraph (a) above constitutes remuneration as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of his employment.
	(4) In paragraph 5(b) of Schedule 1 to that Act (power to modify section 10 for cases where a car is made available by reason of more than one employment), for "a car is made available" there shall be substituted "something is provided or made available".
	(5) In section 114(4) of the Social Security Administration (Northern Ireland) Act 1992 (proof of previous offences relating to Class 1A contributions), for "car" there shall be substituted "amount".
	(6) In section 142(5)(c) of that Act (appropriate health service allocation of Class 1A contributions), for "cash equivalents of the benefits of the cars and car fuel" there shall be substituted "emoluments".
	(7) This section shall have effect in relation to the tax year beginning with 6th April 2000 and subsequent tax years.
	(8) Regulations made by statutory instrument under any power conferred by virtue of this section may be made so as to have retrospective effect in relation to any time in the tax year in which they are made (including, in the case of regulations made in the tax year in which this Act is passed, any time in that tax year before the passing of this Act).
Third party providers of benefits in kind: Northern Ireland.	73. - (1) After section 10 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 there shall be inserted-
Liability of third party provider of benefits in kind.	10ZA. - (1) This section applies, where-
	(a) a Class 1A contribution is payable for any tax year in respect of the whole or any part of an emolument received by an earner;
	(b) the emolument, in so far as it is one in respect of which such a contribution is payable, consists in a benefit provided for the earner or a member of his family or household;
	(c) the person providing the benefit is a person other than the person ("the relevant employer") by whom, but for this section, the Class 1A contribution would be payable in accordance with section 10(2) above; and
	(d) the provision of the benefit by that other person has not been arranged or facilitated by the relevant employer.
	(2) For the purposes of this Act if-
	(a) the person providing the benefit pays an amount for the purpose of discharging any liability of the earner to income tax for any tax year, and
	(b) the income tax in question is tax chargeable in respect of the provision of the benefit or of the making of the payment itself,
	the amount of the payment shall be treated as if it were an emolument consisting in the provision of a benefit to the earner in that tax year and falling, for the purposes of Class 1 contributions, to be left out of account in the computation of the earnings paid to or for the benefit of the earner.
	(3) Subject to subsection (4) below, the liability to pay any Class 1A contribution in respect of-
	(a) the benefit provided to the earner, and
	(b) any further benefit treated as so provided in accordance with subsection (2) above,
	shall fall on the person providing the benefit, instead of on the relevant employer.
	(4) Subsection (3) above applies in the case of a Class 1A contribution for the tax year beginning with 6th April 2000 only if the person providing the benefit in question gives notice in writing to the Inland Revenue on or before 6th July 2001 that he is a person who provides benefits in respect of which a liability to Class 1A contributions is capable of falling by virtue of this section on a person other than the relevant employer.
	(5) The Treasury may by regulations make provision specifying the circumstances in which a person is or is not to be treated for the purposes of this Act as having arranged or facilitated the provision of any benefit.
	(6) In this section references to a member of a person's family or household shall be construed in accordance with section 168(4) of the Income and Corporation Taxes Act 1988.
Non-cash vouchers provided by third parties.	10ZB. - (1) In section 10ZA above references to the provision of a benefit include references to the provision of a non-cash voucher.
	(2) Where-
	(a) a non-cash voucher is received by any person from employment to which Chapter II of Part V of the Income and Corporation Taxes Act 1988 does not apply, and
	(b) the case would be one in which the conditions in section 10ZA(1)(a) to (d) above would be satisfied in relation to the provision of that voucher if that Chapter did apply to that employment,
	sections 10 and 10ZA above shall have effect in relation to the provision of that voucher, and to any such payment in respect of the provision of that voucher as is mentioned in section 10ZA(2) above, as if that employment were employment to which that Chapter applied.
	(3) In this section "non-cash voucher" has the same meaning as in section 141 of the Income and Corporation Taxes Act 1988.
	(2) After subsection (3) of section 104ZA of the Social Security Administration (Northern Ireland) Act 1992 (premises liable to inspection) there shall be inserted-
	(3A) The references in subsection (3) above to a trade or business include references to the administration of any scheme for the provision of benefits to persons by reason of their employment.
	(3) Subsection (1) shall have effect in relation to the tax year beginning with 6th April 2000 and subsequent tax years.
	(4) Regulations made by virtue of this section under section 10ZA(5) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 may be made so as to have retrospective effect in relation to any time in the tax year in which they are made (including, in the case of regulations made in the tax year in which this Act is passed, any time in that tax year before the passing of this Act).
	74. - (1) Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (supplementary provisions relating to contributions) shall be amended in accordance with subsections (2) to (5) below.
	(2) In paragraph 7(2)(b) (application of sections 100 to 100D and 102 to 104 of the Taxes Management Act 1970 in relation to certain penalties), for "104" there shall be substituted "105".
	(3) For sub-paragraph (2)(e) of paragraph 7B (power to provide for interest to be charged on late payment in the case of payment outside the PAYE system) there shall be substituted-
	(e) require interest to be paid on contributions that are not paid by the due date, and provide for determining the date from which such interest is to be calculated;.
	(4) After sub-paragraph (5) of that paragraph there shall be inserted-
	(5A) Regulations under this paragraph may, in relation to any penalty imposed by such regulations, make provision applying (with or without modifications) any enactment applying for the purposes of income tax that is contained in Part X of the Taxes Management Act 1970 (penalties).
	(5) After that paragraph there shall be inserted-
	7BA. The Inland Revenue may by regulations provide for amounts in respect of contributions or interest that fall to be paid or repaid in accordance with any regulations under this Schedule to be set off, or to be capable of being set off, in prescribed circumstances and to the prescribed extent, against any such liabilities under regulations under this Schedule of the person entitled to the payment or repayment as may be prescribed.
	(6) In Article 7(1) of the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999 (decisions to be made by an Inland Revenue officer and appealable under Article 10)-
	(a) sub-paragraph (j) (interest under regulations made by virtue of paragraph 7B(2)(e) of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992) shall cease to have effect; and
	(b) in sub-paragraph (l), for "sub-paragraphs (j) and (k)" there shall be substituted "sub-paragraph (k)", and the words "amount of interest or" shall be omitted.
	(7) Subsection (6) has effect in relation to interest accruing on sums becoming due in respect of the tax year beginning with 6th April 2000 or any subsequent tax year.

Prepared 10 March 2000