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Make provision for and in connection with increasing rates of national |
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insurance contributions and a regional secondary Class 1 contributions |
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holiday for new businesses. |
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Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and |
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consent of the Lords Spiritual and Temporal, and Commons, in this present |
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Parliament assembled, and by the authority of the same, as follows:— |
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(1) | In section 8(2) of SSCBA 1992 and SSCB(NI)A 1992 (calculation of primary |
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(a) | in paragraph (a) (main primary percentage), for “11” substitute “12”, |
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(b) | in paragraph (b) (additional primary percentage), for “1” substitute “2”. |
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(2) | In section 9(2) of SSCBA 1992 and SSCB(NI)A 1992 (calculation of secondary |
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Class 1 percentage), for “12.8” substitute “13.8”. |
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(1) | In section 15(3ZA) of SSCBA 1992 and SSCB(NI)A 1992 (Class 4 percentages)— |
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(a) | in paragraph (a) (main Class 4 percentage), for “8” substitute “9”, and |
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(b) | in paragraph (b) (additional Class 4 percentage), for “1” substitute “2”. |
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(2) | In section 143(4)(b) of SSAA 1992 (power to alter contributions with a view to |
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adjusting level of National Insurance Fund: main Class 4 percentage not to be |
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increased to more than 8.25 per cent), for “8.25” substitute “9.25”. |
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3 | Increased product of additional rates to be paid into National Insurance Fund |
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In section 162(5) of SSAA 1992 and section 142(5) of SSA(NI)A 1992 |
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(destination of contributions: 100 per cent of product of additional primary |
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percentage rate and additional Class 4 percentage rate to form part of health |
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service allocation), for “100” substitute “50”. |
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Regional secondary contributions holiday for new businesses |
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4 | Holiday for new businesses |
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(1) | This section applies where— |
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(a) | a person, or a number of persons in partnership, (“P”) starts a new |
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business during the relevant period, |
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(b) | the principal place at which the new business is carried on when it is |
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started is not in any of the excluded regions, and |
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(c) | one or more persons are qualifying employees in relation to the new |
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(2) | The appropriate amount in respect of each qualifying employee may be— |
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(a) | deducted from Class 1 contributions payments which P is liable to |
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(3) | Section 5 defines what is meant by “starting a new business”. |
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(4) | “The relevant period” is the period— |
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(a) | beginning with 22 June 2010, and |
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(b) | ending with 5 September 2013. |
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(5) | “The excluded regions” are Greater London, the South East Region and the |
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(6) | Section 6 specifies when a person is a qualifying employee in relation to a new |
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(7) | Section 7 specifies what is the appropriate amount in respect of a qualifying |
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(8) | Section 8 explains how a deduction or refund is made. |
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(9) | Section 9 makes provision requiring the retention of records. |
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(10) | Section 10 contains an anti-avoidance rule. |
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(11) | Section 11 makes provision for the interpretation of this Part. |
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5 | Starting a new business |
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(1) | P “starts” a new business when P begins to carry on a new business. |
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(2) | A business is not a “new” business if— |
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(a) | P has, at any time during the period of 6 months ending with the time |
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when P begins to carry it on, carried on another business consisting of |
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the activities of which the business consists (or most of them), or |
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(b) | P carries it on as a result of a transfer (within the meaning of subsection |
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(3) | P carries on a business as a result of a transfer if P begins to carry on the |
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business on another person ceasing to carry on the activities of which it consists |
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(or most of them) in consequence of arrangements involving P and the other |
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(4) | For the purposes of subsection (3) P is to be taken to begin to carry on a |
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business on another person ceasing to carry on such activities if— |
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(a) | the business begins to be carried on by P otherwise than in partnership |
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on such activities ceasing to be carried on by persons in partnership, or |
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(b) | P is a number of persons in partnership who begin to carry on the |
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business on such activities ceasing to be carried on— |
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(i) | by a person, or a number of persons, otherwise than in |
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(ii) | by persons in a partnership not consisting only of all the |
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persons constituting P, or |
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(iii) | partly as mentioned in sub-paragraph (i) and partly as |
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mentioned in sub-paragraph (ii). |
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(5) | P is not to be regarded as starting a new business by beginning to carry on a |
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(a) | before P begins to carry on the business, P is a party to arrangements |
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under which P may (at any time during the relevant period) carry on as |
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part of the business activities carried on by any other person, and |
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(b) | the business would have been prevented by subsection (2)(b) from |
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being a new business had— |
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(i) | P begun to carry on the activities when beginning to carry on |
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(ii) | the other person at that time ceased to carry them on. |
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(6) | In this section “business” means something which is— |
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(a) | a trade, profession or vocation for the purposes of the Income Tax Acts |
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or the Corporation Tax Acts, |
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(b) | a property business (within the meaning of section 263(6) of the Income |
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Tax (Trading and Other Income) Act 2005), or |
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(c) | an investment business (that is, a business consisting wholly or partly |
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(1) | A person is a “qualifying employee” in relation to a new business if— |
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(a) | the person first becomes employed as an employed earner for the |
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purposes of the new business before the end of the initial period, and |
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(b) | P is the secondary contributor in relation to any payment of earnings to |
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or for the benefit of the person in respect of the employment at any time |
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during the period that is the holiday period in relation to the person. |
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(2) | Where (apart from this subsection) there would be more than 10 qualifying |
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employees, only the first 10 persons who become qualifying employees are |
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(3) | The “initial period” means the period of one year beginning with— |
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(a) | the date on which P starts the new business, or |
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(b) | if earlier, the first date on which a person first becomes employed as an |
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employed earner for the purposes of the new business, |
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| but if the first date on which a person first becomes employed as an employed |
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earner for the purposes of the new business is before 22 June 2010, the person |
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is to be taken for the purposes of paragraph (b) as first so employed on that |
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(4) | The “holiday period”, in relation to a person, is the period— |
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(a) | beginning with the day on which the person first becomes employed as |
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an employed earner for the purposes of the new business or, if the |
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person first becomes so employed before 6 September 2010, with that |
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(b) | ending with the earlier of— |
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(i) | the end of the period of one year beginning with the day on |
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(ii) | the end of the relevant period. |
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(5) | None of the following has effect for the purposes of this Part— |
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(a) | the Social Security Contributions (Intermediaries) Regulations 2000 |
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(S.I. 2000/727) and the Social Security Contributions (Intermediaries) |
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(Northern Ireland) Regulations 2000 (S.I. 2000/728) (which provide in |
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certain cases for an intermediary to be treated as the secondary |
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contributor in relation to the payment of earnings), and |
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(b) | the Social Security Contributions (Managed Service Companies) |
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Regulations 2007 (S.I. 2007/2070) (which provide in certain cases for a |
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managed service company to be treated as the secondary contributor in |
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relation to the payment of earnings). |
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(1) | The appropriate amount in respect of a qualifying employee is the relevant |
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amount of secondary Class 1 contributions. |
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(2) | “The relevant amount of secondary Class 1 contributions” is the amount of |
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secondary Class 1 contributions which P is liable to pay in respect of relevant |
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(3) | “Relevant earnings” are earnings paid to or for the benefit of the qualifying |
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employee, in respect of employment as an employed earner for the purposes |
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of the new business, at any time during the holiday period when the principal |
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place at which the business is carried on is not in any of the excluded regions. |
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(4) | But if (apart from this subsection) the relevant amount of secondary Class 1 |
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contributions would exceed £5,000, it is the first £5,000 which P becomes liable |
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(5) | In the case of a qualifying employee who is a mariner, the reference in |
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subsection (3) to earnings paid at any time during the holiday period includes, |
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in relation to earnings paid for a voyage beginning in the holiday period but |
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ending after it, earnings earned in the part of the voyage period falling within |
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| “Mariner” and “voyage period” have the meaning given by regulation 115 of |
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(6) | If P is liable to pay secondary Class 1 contributions at the contracted-out rate, |
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P is to be treated for the purposes of subsection (2) as liable to pay them at the |
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non-contracted-out rate; and for this purpose “contracted-out rate” and “non- |
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contracted-out rate” have the same meaning as in the 2001 Regulations. |
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