National Insurance Contributions Bill

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

National Insurance Contributions Bill

National Insurance Contributions Bill
1

A
Bill
To
Make provision about national insurance contributions in cases where there is
a retrospective change to the law relating to income tax and to enable related
provision to be made for the purposes of contributory benefits, statutory
payments and other matters; to make provision about the disclosure of
information in relation to arrangements for the avoidance of national
insurance contributions; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Power to make provision in consequence of retrospective tax legislation
1
Earnings: power to make provision in consequence of retrospective tax
legislation: Great Britain
(1)
After section 4A of the Social Security Contributions and Benefits Act 1992
(c. 4) insert—
5
“4B
Earnings: power to make retrospective provision in consequence of
retrospective tax legislation
(1)
This section applies where—
(a)
a provision of the Income Tax Acts which relates to income tax
chargeable under the employment income Parts of ITEPA 2003
10
is passed or made so as to have retrospective effect (“the
retrospective tax provision”), and
(b)
it appears to the Treasury to be appropriate to make regulations
under a relevant power for the purpose of reflecting the whole
or part of the provision made by the retrospective tax provision.
15
(2)
Those regulations may be made so as to have retrospective effect if it
appears to the Treasury to be expedient, in consequence of the
retrospective tax provision, for the regulations to have that effect.

Bill 53 54/1

National Insurance Contributions Bill
2

(3)
A “relevant power” means a power to make regulations under any of
the following provisions—
(a)
section 3 (power to prescribe the manner and basis of the
calculation or estimation of earnings);
(b)
section 4(6) (power to treat amounts chargeable to income tax
5
under the employment income Parts of ITEPA 2003 as
earnings);
(c)
section 4A (power to treat payments or benefits to workers
supplied by service companies etc as earnings).
(4)
It does not matter whether the retrospective tax provision in question
10
was passed or made before the day on which the National Insurance
Contributions Act 2006 was passed.
(5)
But nothing in subsection (2) authorises regulations to be made which
have effect in relation to any time before 2nd December 2004.
(6)
Regulations under a relevant power made by virtue of subsection (2)
15
may affect, for the purposes of any contributions legislation for the
purposes of which the regulations are made, the earnings in respect of
an employment paid to or for the benefit of an earner at a time before
the regulations are made.
(7)
In such a case, subsections (8) and (9) apply and in those subsections
20
and this subsection—
“relevant contributions legislation” means any contributions
legislation for the purposes of which the regulations have the
effect mentioned in subsection (6);
“the relevant time” means the time before the regulations are
25
made mentioned in that subsection;
“the revised earnings” means the earnings, in respect of the
employment, paid to or for the benefit of the earner at the
relevant time as determined after applying the regulations.
(8)
References in any relevant contributions legislation, or any provision
30
made under any such legislation, which relate to—
(a)
the earnings, in respect of the employment, paid to or for the
benefit of the earner at the relevant time, or
(b)
the amount of such earnings so paid at that time,

are to be read, in so far as they so relate, as references which relate to
35
the revised earnings or, as the case may be, the amount of those
earnings.
(9)
Any matter which, at the time when the regulations are made, has been
determined for the purposes of any relevant contributions legislation,
or any provision made under any such legislation, wholly or partly by
40
reference to—
(a)
the earnings, in respect of the employment, paid to or for the
benefit of the earner at the relevant time, or
(b)
the amount of such earnings so paid at that time,

is to be redetermined as it would have been determined at the time of
45
the original determination if it had been determined wholly or partly,
as the case may be, by reference to the revised earnings or the amount
of those earnings.

National Insurance Contributions Bill
3

(10)
The matters referred to in subsection (9) may include—
(a)
whether Class 1 contributions are payable in respect of earnings
paid to or for the benefit of the earner in a tax week, and
(b)
the amount of any such contribution.
(11)
Subsections (7) to (10) are subject to any express provision to the
5
contrary (including any such provision made by regulations under
section 4C(1)).
(12)
The power conferred by subsection (2) is without prejudice to any
powers conferred by or by virtue of any other provision of this Act or
of any other enactment (including any instrument made under an Act).
10
(13)
For the purposes of this section “contributions legislation” means any
Part of this Act or provision of such a Part.
4C
Power to make provision in consequence of provision made by or by
virtue of section 4B(2) etc
(1)
The Treasury may by regulations made with the concurrence of the
15
Secretary of State make such provision as appears to the Treasury to be
expedient for any of the purposes mentioned in subsection (2) in
consequence of any provision made by or by virtue of section 4B(2).
(2)
Those purposes are—
(a)
any purpose relating to any contributions;
20
(b)
any purpose relating to any contributory benefit or
contribution-based jobseeker’s allowance;
(c)
any purpose relating to any statutory payment;
(d)
any purpose relating to minimum payments (within the
meaning of the Pensions Act) by employers to occupational
25
pension schemes;
(e)
any purpose of Chapter 2 of Part 3 of that Act (reduction in state
scheme contributions and benefits for members of certified
schemes);
(f)
such other purposes as may be prescribed by regulations made
30
by the Treasury with the concurrence of the Secretary of State.
(3)
Regulations under subsection (1) may, in particular, make provision—
(a)
modifying any provision of any enactment (including this Act
and any enactment passed or made on or after the
commencement day);
35
(b)
for any provision of any such enactment to apply in such cases,
and with such modifications (if any), as the regulations may
prescribe.
(4)
Regulations under subsection (1) may be made so as to have
retrospective effect but must not have effect in relation to any time
40
before 2nd December 2004.
(5)
In particular, regulations under subsection (1) made by virtue of
subsection (4) may affect any of the following matters—
(a)
liability to pay contributions, including liability to pay Class 1
contributions at a reduced rate by virtue of Chapter 2 of Part 3
45
of the Pensions Act;

National Insurance Contributions Bill
4

(b)
the amount of any contribution, including the amount of any
such reduced rate contribution and of any related rebate under
section 41(1D) or 42A(2C) of that Act;
(c)
entitlement to a contributory benefit or contribution-based
jobseeker’s allowance;
5
(d)
the amount of any such benefit or allowance;
(e)
entitlement to a statutory payment;
(f)
the amount of any such payment;
(g)
liability to make minimum payments (within the meaning of
the Pensions Act) to occupational pension schemes;
10
(h)
the amount of any such payment;
(i)
liability to make payments under section 42A(3) of the Pensions
Act or to pay minimum contributions under section 43 of that
Act;
(j)
the amount of any such payment or contribution.
15
(6)
In such a case, where the matter has been determined before the time
when the regulations are made, the regulations may provide for the
matter to be redetermined accordingly.
(7)
If (ignoring this subsection) the operative provisions would directly or
indirectly have effect in any case so as—
20
(a)
to remove a person’s entitlement to a contributory benefit,
contribution-based jobseeker’s allowance or statutory payment,
or
(b)
to reduce the amount of any such benefit, allowance or payment
to which a person has an entitlement,
25

those provisions are to be read with such modifications as are necessary
to ensure that they do not have that effect.
(8)
For the purposes of subsection (7)—
(a)
“the operative provisions” are section 4B(7) to (10) and any
provision made by virtue of section 4B(2) or under subsection
30
(1) of this section;
(b)
a person’s “entitlement” includes any future entitlement which
the person may have.
(9)
The powers conferred by this section are without prejudice to any
powers conferred by or by virtue of any other provision of this Act or
35
any other enactment.
(10)
In particular, any modification of any provision of an instrument by
regulations made under subsection (1) is without prejudice to any other
power to amend or revoke the provisions of the instrument (including
the modified provision).
40
(11)
For the purposes of this section—
“the commencement day” means the day on which the National
Insurance Contributions Act 2006 was passed;
“enactment” includes an instrument made under an Act;
“statutory payment” means—
45
(a)
statutory sick pay, statutory maternity pay, statutory
paternity pay or statutory adoption pay; or

National Insurance Contributions Bill
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(b)
any other payment prescribed by regulations made by
the Treasury with the concurrence of the Secretary of
State.”
(2)
In section 176 of that Act (parliamentary control of statutory instruments)—
(a)
in subsection (1)(a), at the appropriate place in the list insert—
5
“section 4B(2);
section 4C;”, and
(b)
after subsection (2) insert—
“(2A)
In the case of a statutory instrument containing (whether alone
or with other provisions) regulations made by virtue of section
10
4B(2) to which subsection (1) above applies, the draft of the
instrument must be laid before Parliament before the end of the
period of 12 months beginning with the appropriate date.
(2B)
For the purposes of subsection (2A), the “appropriate date”
means—
15
(a)
where the corresponding retrospective tax provision
was passed or made before the day on which the
National Insurance Contributions Act 2006 was passed,
the date upon which that Act was passed, and
(b)
in any other case, the date upon which the
20
corresponding retrospective tax provision was passed
or made.
(2C)
For the purposes of subsection (2B), “the corresponding
retrospective tax provision” in relation to the regulations
means—
25
(a)
the retrospective tax provision mentioned in subsection
(1) of section 4B in relation to which the regulations are
to be made by virtue of subsection (2) of that section, or
(b)
where there is more than one such tax provision,
whichever of those provisions was the first to be passed
30
or made.”
2
Earnings: power to make provision in consequence of retrospective tax
legislation: Northern Ireland
(1)
After section 4A of the Social Security Contributions and Benefits (Northern
Ireland) Act 1992 (c. 7) insert—
35
“4B
Earnings: power to make retrospective provision in consequence of
retrospective tax legislation
(1)
This section applies where—
(a)
a provision of the Income Tax Acts which relates to income tax
chargeable under the employment income Parts of ITEPA 2003
40
is passed or made so as to have retrospective effect (“the
retrospective tax provision”), and
(b)
it appears to the Treasury to be appropriate to make regulations
under a relevant power for the purpose of reflecting the whole
or part of the provision made by the retrospective tax provision.
45

National Insurance Contributions Bill
6

(2)
Those regulations may be made so as to have retrospective effect if it
appears to the Treasury to be expedient, in consequence of the
retrospective tax provision, for the regulations to have that effect.
(3)
A “relevant power” means a power to make regulations under any of
the following provisions—
5
(a)
section 3 (power to prescribe the manner and basis of the
calculation or estimation of earnings);
(b)
section 4(6) (power to treat amounts chargeable to income tax
under the employment income Parts of ITEPA 2003 as
earnings);
10
(c)
section 4A (power to treat payments or benefits to workers
supplied by service companies etc as earnings).
(4)
It does not matter whether the retrospective tax provision in question
was passed or made before the day on which the National Insurance
Contributions Act 2006 was passed.
15
(5)
But nothing in subsection (2) authorises regulations to be made which
have effect in relation to any time before 2nd December 2004.
(6)
Regulations under a relevant power made by virtue of subsection (2)
may affect, for the purposes of any contributions legislation for the
purposes of which the regulations are made, the earnings in respect of
20
an employment paid to or for the benefit of an earner at a time before
the regulations are made.
(7)
In such a case, subsections (8) and (9) apply and in those subsections
and this subsection—
“relevant contributions legislation” means any contributions
25
legislation for the purposes of which the regulations have the
effect mentioned in subsection (6);
“the relevant time” means the time before the regulations are
made mentioned in that subsection;
“the revised earnings” means the earnings, in respect of the
30
employment, paid to or for the benefit of the earner at the
relevant time as determined after applying the regulations.
(8)
References in any relevant contributions legislation, or any provision
made under any such legislation, which relate to—
(a)
the earnings, in respect of the employment, paid to or for the
35
benefit of the earner at the relevant time, or
(b)
the amount of such earnings so paid at that time,

are to be read, in so far as they so relate, as references which relate to
the revised earnings or, as the case may be, the amount of those
earnings.
40
(9)
Any matter which, at the time when the regulations are made, has been
determined for the purposes of any relevant contributions legislation,
or any provision made under any such legislation, wholly or partly by
reference to—
(a)
the earnings, in respect of the employment, paid to or for the
45
benefit of the earner at the relevant time, or
(b)
the amount of such earnings so paid at that time,

National Insurance Contributions Bill
7


is to be redetermined as it would have been determined at the time of
the original determination if it had been determined wholly or partly,
as the case may be, by reference to the revised earnings or the amount
of those earnings.
(10)
The matters referred to in subsection (9) may include—
5
(a)
whether Class 1 contributions are payable in respect of earnings
paid to or for the benefit of the earner in a tax week, and
(b)
the amount of any such contribution.
(11)
Subsections (7) to (10) are subject to any express provision to the
contrary (including any such provision made by regulations under
10
section 4C(1)).
(12)
The power conferred by subsection (2) is without prejudice to any
powers conferred by or by virtue of any other provision of this Act or
of any other enactment.
(13)
For the purposes of this section—
15
“contributions legislation” means any Part of this Act or provision
of such a Part;
“enactment” has the same meaning as it has for the purposes of
section 4C.
4C
Power to make provision in consequence of provision made by or by
20
virtue of section 4B(2) etc
(1)
The Treasury may by regulations made with the concurrence of the
relevant Northern Ireland department (if any) make such provision as
appears to the Treasury to be expedient for any of the purposes
mentioned in subsection (2) in consequence of any provision made by
25
or by virtue of section 4B(2).
(2)
Those purposes are—
(a)
any purpose relating to any contributions;
(b)
any purpose relating to any contributory benefit or
contribution-based jobseeker’s allowance;
30
(c)
any purpose relating to any statutory payment;
(d)
any purpose relating to minimum payments (within the
meaning of the Pensions Act) by employers to occupational
pension schemes;
(e)
any purpose of Chapter 2 of Part 3 of that Act (reduction in state
35
scheme contributions and benefits for members of certified
schemes);
(f)
such other purposes as may be prescribed by regulations made
by the Treasury with the concurrence of the relevant Northern
Ireland department (if any).
40
(3)
Regulations under subsection (1) may, in particular, make provision—
(a)
modifying any provision of any enactment (including this Act
and any enactment passed or made on or after the
commencement day);
(b)
for any provision of any such enactment to apply in such cases,
45
and with such modifications (if any), as the regulations may
prescribe.