Draft NICs rules for “disguised remuneration” publishedSaturday, September 3rd, 2011
The Class 1 NICs rules for handling liabilities for disguised remuneration are almost identical to the PAYE rules.
The new legislation, effect from April 2011, that requires money, loans and assets provided in specific situations through third parties to be taxed under PAYE, has been covered in some detail in a recent article. Such benefits are also liable for Class 1 NICs and the regulations to introduce this requirement have now been issued by HMRC in draft.
With only two exceptions, if there is a liability under these new rules for PAYE tax, there is also a liability for Class 1 NICs. The two exceptions are:
- Amounts deriving from duties of an employment performed overseas or with an overseas employer and chargeable to income tax on the remittance basis will be liable to Class 1 NICs on the value of the relevant step when it is taken.
- Where earmarking of sums of money or assets is not followed by a later relevant step, the facility to claim tax relief is not replicated in respect of Class 1 NICs.