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NATIONAL INSURANCE CONTRIBUTIONS ACT 2014

UK Public General Acts

Version 15/09/2016

2014 CHAPTER 7

Default Geographical Extent: E+W+S+N.I.


  • Employment allowance
  • Introduction of age-related secondary percentage
  • Application of general anti-abuse rule to national insurance contributions
  • Oil and gas workers on the continental shelf
  • Partnerships
  • Other provision
  • General
  • Version 15/09/2016
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  • Version 06/04/2016
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  • Version 06/04/2015
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  • Version 13/03/2014

Introductory Text

National Insurance Contributions Act 2014

2014 CHAPTER 7

An Act to make provision in relation to national insurance contributions; and for connected purposes.

[13th March 2014]

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:—

Employment allowance


1 Employment allowance for national insurance contributions

(1) A person qualifies for an employment allowance for a tax year if, in the tax year—

(a) the person is the secondary contributor in relation to payments of earnings to, or for the benefit of, one or more employed earners, and
(b) in consequence, the person incurs liabilities to pay secondary Class 1 contributions,
under SSCBA 1992 or SSCB(NI) A 1992 (or both).
(2) The person's employment allowance for the tax year is—

(a) [F1 £3,000] , or
(b) if less, an amount equal to the total amount of the liabilities mentioned in subsection (1) (b) which are not excluded liabilities.
(3) Subsection (1) is subject to sections 2 and 3 (and Schedule 1).

(4) Sections 2 and 3 (and Schedule 1) set out cases in which a person cannot qualify for an employment allowance for a tax year.

(5) Section 2 also sets out the cases in which liabilities to pay secondary Class 1 contributions are “excluded liabilities”.

(6) Section 4 provides for a person who qualifies for an employment allowance for a tax year to receive it by way of deductions or a repayment under that section.

(7) In this Act references to “the employment allowance provisions” are to this section, sections 2 to 4 and Schedule 1.

(8) In the employment allowance provisions and section 5 terms used which are also used in Part 1 of SSCBA 1992 or SSCB(NI) A 1992 have the same meaning as they have in that Part.

Annotations:

Amendments (Textual)

F1 Sum in s. 1(2)(a) substituted (6.4.2016) by The Employment Allowance (Increase of Maximum Amount) Regulations 2016 (S.I. 2016/63), regs. 1, 2


2 Exceptions

Public authorities

(1) A person cannot qualify for an employment allowance for a tax year if, at any time in the tax year, the person is a public authority which is not a charity.

(2) In subsection (1) — “charity” has the same meaning as in the Small Charitable Donations Act 2012 (see section 18(1) of that Act) , and “public authority” includes any person whose activities involve, wholly or mainly, the performance of functions (whether or not in the United Kingdom) which are of a public nature.

Personal, family or household affairs

(3) Liabilities to pay secondary Class 1 contributions incurred by a person (“P”) are “excluded liabilities” if they are incurred in respect of an employed earner who is employed (wholly or partly) for purposes connected with P's personal, family or household affairs.

[F2 (3A) But the liabilities mentioned in subsection (3) are not “excluded liabilities” by virtue of that subsection if all the duties of the employed earner’s employment which relate to P’s personal, family or household affairs are performed for an individual who needs those duties to be performed because of the individual’s—

(a) old age,
(b) mental or physical disability,
(c) past or present dependence on alcohol or drugs,
(d) past or present illness, or
(e) past or present mental disorder.]
Workers supplied by service companies etc

(4) Liabilities to pay secondary Class 1 contributions are “excluded liabilities” if they are incurred by virtue of regulations made under section 4A of SSCBA 1992 or SSCB(NI) A 1992 (earnings of workers supplied by service companies etc).

[F3 Excluded companies

(4A) A body corporate (“C”) cannot qualify for an employment allowance for a tax year if—

(a) all the payments of earnings in relation to which C is the secondary contributor in that year are paid to, or for the benefit of, the same employed earner, and
(b) when each of those payments is made, that employed earner is a director of C.]
Transfers of businesses

(5) Subsection (6) applies if a business, or a part of a business, is transferred to a person (“P”) in a tax year.

(6) Liabilities to pay secondary Class 1 contributions incurred by P in the tax year are “excluded liabilities” if they are incurred in respect of an employed earner who is employed (wholly or partly) for purposes connected with the transferred business or part.

(7) For the purposes of subsection (5) a business, or a part of a business, is transferred to P in a tax year if, in the tax year—

(a) another person (“Q”) is carrying on the business or part, and
(b) in consequence of arrangements involving P and Q, P begins to carry on the business or part on or following Q ceasing to do so.
(8) In subsection (7) (b) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

(9) In subsections (5) to (7) “business” includes—

(a) anything which is a trade, profession or vocation for the purposes of the Income Tax Acts or the Corporation Tax Acts;
(b) a property business (as defined in section 263(6) of the Income Tax (Trading and Other Income) Act 2005) ;
(c) any charitable or not-for-profit undertaking or any similar undertaking;
(d) functions of a public nature.
Anti-avoidance

(10) A person cannot qualify for an employment allowance for a tax year if, apart from this subsection, the person would qualify in consequence of avoidance arrangements.

(11) In a case not covered by subsection (10) , liabilities to pay secondary Class 1 contributions incurred by a person (“P”) in a tax year are “excluded liabilities” if they are incurred by P, or are incurred by P in that tax year (as opposed to another tax year) , in consequence of avoidance arrangements.

(12) In subsections (10) and (11) “avoidance arrangements” means arrangements the main purpose, or one of the main purposes, of which is to secure that a person benefits, or benefits further, from the application of the employment allowance provisions.

(13) In subsection (12) “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable).

Annotations:

Amendments (Textual)

F2 S. 2(3A) inserted (6.4.2015) by The Employment Allowance (Care and Support Workers) Regulations 2015 (S.I. 2015/578), regs. 1, 2

F3 S. 2(4A) inserted (6.4.2016) by The Employment Allowance (Excluded Companies) Regulations 2016 (S.I. 2016/344), regs. 1, 2


3 Connected persons

(1) This section applies if—

(a) at the beginning of a tax year, two or more companies which are not charities are connected with one another, and
(b) apart from this section, two or more of those companies would qualify for an employment allowance for the tax year.
(2) This section also applies if—

(a) at the beginning of a tax year, two or more charities are connected with one another, and
(b) apart from this section, two or more of those charities would qualify for an employment allowance for the tax year.
(3) Only one of the companies or charities mentioned in subsection (1) (b) or (2) (b) (as the case may be) can qualify for an employment allowance for the tax year.

(4) It is up to the companies or charities so mentioned to decide which of them that will be.

(5) Part 1 of Schedule 1 sets out the rules for determining if two or more companies are “connected” with one another for the purposes of subsection (1).

(6) Part 2 of Schedule 1 sets out the rules for determining if two or more charities are “connected” with one another for the purposes of subsection (2).

(7) In this section and Schedule 1— “charity” has the same meaning as in the Small Charitable Donations Act 2012 (see section 18(1) of that Act) , subject to paragraph 8(5) of Schedule 1, and “company” has the meaning given by section 1121(1) of the Corporation Tax Act 2010 (meaning of “company”) and includes a limited liability partnership.

4 How does a person who qualifies for an employment allowance receive it?

(1) Her Majesty's Revenue and Customs (“HMRC”) must (from time to time) make such arrangements as HMRC consider appropriate for persons who qualify for an employment allowance for a tax year to receive it by making deductions from qualifying payments which they are required to make under regulations made under paragraph 6 of Schedule 1 to SSCBA 1992 or SSCB(NI) A 1992 (regulations combining collection of contributions with tax).

(2) In this section “qualifying payment”, in relation to a person who qualifies for an employment allowance for a tax year, means a payment in respect of any of the person's liabilities mentioned in section 1(1) (b) which are not excluded liabilities (see section 2).

(3) If under HMRC's arrangements a person is permitted to make a deduction from a qualifying payment, the person must make the deduction and must make it before any other deductions which the person is permitted to make from the payment under any other legislation.

(4) HMRC's arrangements may (in particular) —

(a) require deductions to be made at the earliest opportunity in a tax year;
(b) provide that deductions may not be made in specified cases;
(c) place limits on the amounts of deductions;
(d) provide that a person is not permitted to make deductions unless the person has first given notice to HMRC in such form and manner, and containing such information, as HMRC may require.
(5) Subsections (6) to (8) apply in relation to a person who qualifies for an employment allowance for a tax year if the person has not deducted under this section the full amount of the employment allowance by the end of the month of April in which the tax year ends.

(6) The person may apply to HMRC for a repayment, up to the outstanding amount of the employment allowance, of qualifying payments made by the person; and HMRC must make the repayment.

(7) The person's application must be made in such form and manner, and contain such information, as HMRC may require.

(8) The person's application must be made before the end of the 4th tax year after the tax year mentioned in subsection (5).

(9) In the application of section 102 of the Finance Act 2009 (repayment interest on sums to be paid by HMRC) in relation to a repayment under this section, the repayment interest start date is the date on which HMRC receive the person's application.

(10) A repayment under this section, and any interest in respect of it under section 102 of the Finance Act 2009, are to be paid out of the National Insurance Fund or the Northern Ireland National Insurance Fund.

(11) A person who qualifies for an employment allowance for a tax year may not receive it otherwise than by way of deductions or a repayment under this section.

5 Power to amend the employment allowance provisions

(1) The Treasury may by regulations amend the employment allowance provisions—

(a) so as to increase or decrease a person's employment allowance for a tax year, or
(b) so as to add to, reduce or modify the cases in which a person cannot qualify for an employment allowance for a tax year or in which liabilities to pay secondary Class 1 contributions are “excluded liabilities”.
(2) Section 175(3) to (5) of SSCBA 1992 (various supplementary powers) applies to the power to make regulations conferred by this section.

(3) The power conferred by section 175(4) of SSCBA 1992, as applied by subsection (2) , includes (in particular) power to make the provision mentioned in section 175(4) by way of amendments to the employment allowance provisions.

(4) Regulations under this section must be made by statutory instrument.

(5) A statutory instrument containing (with or without other provision) —

(a) regulations falling within subsection (1) (a) which decrease a person's employment allowance for a tax year, or
(b) regulations falling within subsection (1) (b) ,
may not be made unless a draft has been laid before, and approved by a resolution of, each House of Parliament.
(6) A statutory instrument—

(a) which contains regulations falling within subsection (1) (a) which increase a person's employment allowance for a tax year, and
(b) which does not have to be approved in draft under subsection (5) ,
must be laid before Parliament after being made.
(7) Regulations contained in a statutory instrument which is required to be laid before Parliament under subsection (6) cease to have effect at the end of the period of 40 days after the day on which the instrument is made unless, before the end of that period, the instrument is approved by a resolution of each House of Parliament.

(8) If regulations cease to have effect as a result of subsection (7) , that does not—

(a) affect anything previously done by virtue of the regulations, or
(b) prevent the making of new regulations to the same or a similar effect.
(9) In calculating the period of 40 days for the purposes of subsection (7) , no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than 4 days.

6 Decisions and appeals about entitlements to make deductions etc

(1) In Part 2 of the Social Security Contributions (Transfer of Functions, etc) Act 1999 (decisions and appeals) , in section 8(1) (decisions of officers of Revenue and Customs) , after paragraph (e) insert—

“(ea) to decide whether a person is or was entitled to make a deduction under section 4 of the National Insurance Contributions Act 2014 (deductions etc of employment allowance) and, if so, the amount the person is or was entitled to deduct,
(eb) to decide whether a person is or was entitled to a repayment under that section and, if so, the amount of the repayment,”.
(2) In Part 3 of the Social Security Contributions (Transfer of Functions, etc) (Northern Ireland) Order 1999 (S.I. 1999/671) (decisions and appeals) , in Article 7(1) (decisions of officers of Revenue and Customs) , after paragraph (e) insert—

“(ea) to decide whether a person is or was entitled to make a deduction under section 4 of the National Insurance Contributions Act 2014 (deductions etc of employment allowance) and, if so, the amount the person is or was entitled to deduct,
(eb) to decide whether a person is or was entitled to a repayment under that section and, if so, the amount of the repayment,”.

7 Retention of records etc

(1) In Schedule 1 to SSCBA 1992 (supplementary provisions relating to national insurance contributions) , in paragraph 8(1) (general regulation-making powers) , after paragraph (a) insert—

“(aa) for requiring persons to maintain, in such form and manner as may be prescribed, records of such matters as may be prescribed for purposes connected with the employment allowance provisions (within the meaning of the National Insurance Contributions Act 2014) , and to retain the records for so long as may be prescribed;”.
(2) In Schedule 1 to SSCB(NI) A 1992 (supplementary provisions relating to national insurance contributions) , in paragraph 8(1) (general regulation-making powers) , after paragraph (a) insert—

“(aa) for requiring persons to maintain, in such form and manner as may be prescribed, records of such matters as may be prescribed for purposes connected with the employment allowance provisions (within the meaning of the National Insurance Contributions Act 2014) , and to retain the records for so long as may be prescribed;”.
(3) In paragraph 26 of Schedule 4 to the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) (retention of records) , after sub-paragraph (4) insert—

“(4A) Sub-paragraph (4B) applies in relation to an employer who makes deductions, or applies for a repayment, under section 4 of the National Insurance Contributions Act 2014 on account of an employment allowance for which the employer qualifies for a tax year (or who intends to do so).
(4B) So far as they are not otherwise covered by sub-paragraph (4) , “ contribution records ” includes any documents or records relating to—
(a) the employer's qualification for the employment allowance, or
(b) the calculation of any amount that has been, or could be, deducted or repaid under section 4 of the National Insurance Contributions Act 2014 on account of the employment allowance.”
(4) The amendment made by subsection (3) is to be treated as having been made by the Treasury using the powers conferred by paragraph 8(1) (aa) of Schedule 1 to SSCBA 1992 (as inserted by subsection (1) ) and paragraph 8(1) (aa) of Schedule 1 to SSCB(NI) A 1992 (as inserted by subsection (2) ).

(5) In section 110ZA of the Social Security Administration Act 1992 (powers to call for documents etc) , in subsection (2) (a) , after “Benefits Act” insert “ or the National Insurance Contributions Act 2014 ”.

(6) In section 104ZA of the Social Security Administration (Northern Ireland) Act 1992 (powers to call for documents etc) , in subsection (2) (a) , after “Benefits Act” insert “ or the National Insurance Contributions Act 2014 ”.

8 Commencement of the employment allowance provisions etc

Sections 1 to 7 and Schedule 1 come into force on 6 April 2014.

Introduction of age-related secondary percentage


9 Reduction of secondary Class 1 contributions for certain age groups

(1) SSCBA 1992 is amended as follows.

(2) In section 9 (calculation of secondary Class 1 contributions) —

(a) in subsection (1) for “the secondary percentage” substitute “ the relevant percentage ”, and
(b) after subsection (1) insert—
“(1A) For the purposes of subsection (1) “the relevant percentage” is—
(a) if section 9A below applies to the earnings, the age-related secondary percentage;
(b) otherwise, the secondary percentage.”
(3) After section 9 insert—

“9A The age-related secondary percentage
(1) Where a secondary Class 1 contribution is payable as mentioned in section 6(1) (b) above, this section applies to the earnings paid in the tax week, in respect of the employment in question, if the earner falls within an age group specified in column 1 of the table in subsection (3).
(2) For the purposes of section 9(1A) (a) above, the age-related secondary percentage is the percentage for the earner's age group specified in column 2 of the table.
(3) Here is the table—
Age group Age-related secondary percentage
Under 21 0%

(4) The Treasury may by regulations amend the table—
(a) so as to add an age group in column 1 and to specify the percentage in column 2 for that age group;
(b) so as to reduce (or further reduce) the percentage specified in column 2 for an age group already specified in column 1 (whether for the whole of the age group or only part of it).
(5) A percentage specified under subsection (4) (a) must be lower than the secondary percentage.
(6) For the purposes of this Act a person is still to be regarded as being liable to pay a secondary Class 1 contribution even though the amount of the contribution is £0 because the age-related secondary percentage is 0%.
(7) The Treasury may by regulations provide that, in relation to an age group specified in the table, there is to be for every tax year an upper secondary threshold for secondary Class 1 contributions.
That threshold is to be the amount specified for that year by regulations made by the Treasury.
(8) Subsections (4) and (5) of section 5 above (which confer power to prescribe an equivalent of a secondary threshold in relation to earners paid otherwise than weekly) , and subsection (6) of that section as it applies for the purposes of those subsections, apply for the purposes of an upper secondary threshold in relation to an age group as they apply for the purposes of a secondary threshold.
(9) Where—
(a) a secondary Class 1 contribution is payable as mentioned in section 6(1) (b) above,
(b) the earner falls within an age group in relation to which provision has been made under subsection (7) , and
(c) the earnings paid in the tax week, in respect of the employment in question, exceed the current upper secondary threshold (or the prescribed equivalent) in relation to the age group,
this section is not to apply to the earnings so far as they exceed that threshold (or the prescribed equivalent) ; and for the purposes of section 9(1) above the relevant percentage in respect of the earnings so far as they exceed that threshold (or the prescribed equivalent) is, accordingly, to be the secondary percentage.
(10) In subsections (7) to (9) references to an age group include a part of an age group.”
(4) In section 122(1) (interpretation of Parts 1 to 6) , at the appropriate place insert—

““ age-related secondary percentage ” is to be construed in accordance with section 9A(2) above;”.
(5) In section 176(1) (a) (parliamentary control: instruments subject to affirmative procedure) after “section 4C;” insert— “ section 9A(7) ; ”.

(6) SSCB(NI) A 1992 is amended as follows.

(7) In section 9 (calculation of secondary Class 1 contributions) —

(a) in subsection (1) for “the secondary percentage” substitute “ the relevant percentage ”, and
(b) after subsection (1) insert—
“(1A) For the purposes of subsection (1) “the relevant percentage” is—
(a) if section 9A below applies to the earnings, the age-related secondary percentage;
(b) otherwise, the secondary percentage.”
(8) After section 9 insert—

“9A The age-related secondary percentage
(1) Where a secondary Class 1 contribution is payable as mentioned in section 6(1) (b) above, this section applies to the earnings paid in the tax week, in respect of the employment in question, if the earner falls within an age group specified in column 1 of the table in subsection (3).
(2) For the purposes of section 9(1A) (a) above, the age-related secondary percentage is the percentage for the earner's age group specified in column 2 of the table.
(3) Here is the table—
Age group Age-related secondary percentage
Under 21 0%

(4) The Treasury may by regulations amend the table—
(a) so as to add an age group in column 1 and to specify the percentage in column 2 for that age group;
(b) so as to reduce (or further reduce) the percentage specified in column 2 for an age group already specified in column 1 (whether for the whole of the age group or only part of it).
(5) A percentage specified under subsection (4) (a) must be lower than the secondary percentage.
(6) For the purposes of this Act a person is still to be regarded as being liable to pay a secondary Class 1 contribution even though the amount of the contribution is £0 because the age-related secondary percentage is 0%.
(7) The Treasury may by regulations provide that, in relation to an age group specified in the table, there is to be for every tax year an upper secondary threshold for secondary Class 1 contributions.
That threshold is to be the amount specified for that year by regulations made by the Treasury.
(8) Subsections (4) and (5) of section 5 above (which confer power to prescribe an equivalent of a secondary threshold in relation to earners paid otherwise than weekly) , and subsection (6) of that section as it applies for the purposes of those subsections, apply for the purposes of an upper secondary threshold in relation to an age group as they apply for the purposes of a secondary threshold.
(9) Where—
(a) a secondary Class 1 contribution is payable as mentioned in section 6(1) (b) above,
(b) the earner falls within an age group in relation to which provision has been made under subsection (7) , and
(c) the earnings paid in the tax week, in respect of the employment in question, exceed the current upper secondary threshold (or the prescribed equivalent) in relation to the age group,
this section is not to apply to the earnings so far as they exceed that threshold (or the prescribed equivalent) ; and for the purposes of section 9(1) above the relevant percentage in respect of the earnings so far as they exceed that threshold (or the prescribed equivalent) is, accordingly, to be the secondary percentage.
(10) In subsections (7) to (9) references to an age group include a part of an age group.”
(9) In section 121(1) (interpretation of Parts 1 to 6) , at the appropriate place insert—

““ age-related secondary percentage ” is to be construed in accordance with section 9A(2) above;”.
(10) In section 172(11A) (parliamentary control: instruments subject to affirmative procedure) after “4C,” insert “ 9A(7) , ”.

(11) The following come into force at the end of the period of 2 months beginning with the day on which this Act is passed—

(a) any power conferred on the Treasury by virtue of this section to make regulations, and
(b) the amendments made by subsections (5) and (10).
(12) So far as not already brought into force by subsection (11) , the amendments made by this section come into force on 6 April 2015.

Annotations:

Commencement Information

I1 S. 9 wholly in force at 6.4.2015; s. 9 in force at Royal Assent but the amendments made by this section come into force as follows, see s. 9(11)(12): the amendments in s. 9(5)(10) in force at 13.5.2014; the amendments in s. 9(3)(8) in force for specified purposes at 13.5.2014 and otherwise in force at 6.4.2015; the amendments in s. 9(2)(4)(7)(9) in force at 6.4.2015


Application of general anti-abuse rule to national insurance contributions


10 GAAR to apply to national insurance contributions

(1) In Part 5 of the Finance Act 2013 (general anti-abuse rule) —

(a) references to tax, other than in references to particular taxes, include national insurance contributions, and
(b) references to a charge to tax include a liability to pay national insurance contributions.
(2) Section 206(3) of that Act (list of taxes to which the general anti-abuse rule applies) has effect as if it included a reference to national insurance contributions.

(3) Section 207 of that Act (meaning of “tax arrangements” and “abusive”) has effect as if, in subsection (4) (a) , after “income,” there were inserted “earnings (within the meaning of Part 1 of the Social Security Contributions and Benefits Act 1992 or Part 1 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992) ,”.

(4) Adjustments to be made in respect of national insurance contributions under section 209 of the Finance Act 2013 (counteracting the tax advantages) may be made by a notice given under paragraph 12 of Schedule 43 to that Act (notice of final decision) [F4 , paragraph 8 or 9 of Schedule 43A to that Act (pooling of tax arrangements: notice of final decision) or paragraph 8 of Schedule 43B to that Act (generic referral of arrangements: notice of final decision) ] .

(5) For the purposes of section 210 of that Act (consequential relieving adjustments) —

(a) if a claim under that section relates to Class 4 national insurance contributions, Schedule 1A to the Taxes Management Act 1970 (as that Schedule applies in relation to such contributions) applies to it, and
(b) if a claim under that section relates to any other class of national insurance contributions, it must be made in such form and manner, and contain such information, as HMRC may require.
(6) Adjustments to be made in respect of national insurance contributions under that section may be made by a notice given under subsection (7) of that section.

[F5 (6A) Where, by virtue of this section, a case falls within paragraph 4A of Schedule 43 to the Finance Act 2013 (referrals of single schemes: relevant corrective action) or paragraph 4 of Schedule 43A to that Act (pooled schemes: relevant corrective action) —

(a) the person (“P”) mentioned in sub-paragraph (1) of that paragraph takes the “relevant corrective action” for the purposes of that paragraph if (and only if) —
(i) in a case in which the tax advantage in question can be counteracted by making a payment to HMRC , P makes that payment and notifies HMRC that P has done so, or
(ii) in any case, P takes all necessary action to enter into an agreement in writing with HMRC for the purpose of relinquishing the tax advantage, and
(b) accordingly, sub-paragraphs (2) to (8) of that paragraph do not apply.]
(7) This section has effect in relation to tax arrangements (within the meaning of Part 5 of the Finance Act 2013 as modified by this section) entered into on or after the day on which this Act is passed.

(8) Subsections (9) and (10) apply where the tax arrangements—

(a) would not have been tax arrangements but for the modifications made by this section, and
(b) form part of other arrangements entered into before the day on which this Act is passed.
(9) The other arrangements are to be ignored for the purposes of section 207(3) of the Finance Act 2013, subject to subsection (10).

(10) Account is to be taken of the other arrangements for the purposes of that section if, as a result, the tax arrangements would not be abusive.

(11) In this section— “abusive”, “arrangements” [F6 , “HMRC” and “tax advantage”] have the same meaning as in Part 5 of the Finance Act 2013 [F7 (as modified by this section) ] ; “national insurance contributions” means contributions under either Part 1 of SSCBA 1992 or Part 1 of SSCB(NI) A 1992.

[F8 (12) See section 10A for further modifications of Part 5 of the Finance Act 2013.]

Annotations:

Amendments (Textual)

F4 Words in s. 10(4) inserted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(13)

F5 S. 10(6A) inserted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(14)

F6 Words in s. 10(11) substituted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(15)(a)

F7 Words in s. 10(11) inserted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(15)(b)

F8 S. 10(12) inserted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(16)


[F9 10A Application of GAAR in relation to penalties

(1) For the purposes of this section a penalty under section 212A of the Finance Act 2013 is a “relevant NICs-related penalty” so far as the penalty relates to a tax advantage in respect of relevant contributions.

(2) A relevant NICs-related penalty may be recovered as if it were an amount of relevant contributions which is due and payable.

(3) Section 117A of the Social Security Administration Act 1992 or (as the case may be) section 111A of the Social Security Administration (Northern Ireland) Act 1992 (issues arising in proceedings: contributions etc) has effect in relation to proceedings before a court for recovery of a relevant NICs-related penalty as if the assessment of the penalty were a NICs decision as to whether the person is liable for the penalty.

(4) Accordingly, paragraph 5(4) (b) of Schedule 43C to the Finance Act 2013 (assessment of penalty to be enforced as if it were an assessment to tax) does not apply in relation to a relevant NICs-related penalty.

(5) In the application of Schedule 43C to the Finance Act 2013 in relation to a relevant NICs-related penalty, paragraph 9(5) has effect as if the reference to an appeal against an assessment to the tax concerned were to an appeal against a NICs decision.

(6) In paragraph 8 of that Schedule (aggregate penalties) , references to a “relevant penalty provision” include—

(a) any provision mentioned in sub-paragraph (5) of that paragraph, as applied in relation to any class of national insurance contributions by regulations (whenever made) ;
(b) section 98A of the Taxes Management Act 1970, as applied in relation to any class of national insurance contributions by regulations (whenever made) ;
(c) any provision in regulations made by the Treasury under which a penalty can be imposed in respect of any class of national insurance contributions.
(7) The Treasury may by regulations—

(a) disapply, or modify the effect of, subsection (6) (a) or (b) ;
(b) modify paragraph 8 of Schedule 43C to the Finance Act 2013 as it has effect in relation to a relevant penalty provision by virtue of subsection (6) (b) or (c).
(8) Section 175(3) to (5) of SSCBA 1992 (various supplementary powers) applies to a power to make regulations conferred by subsection (7).

(9) Regulations under subsection (7) must be made by statutory instrument.

(10) A statutory instrument containing regulations under subsection (7) is subject to annulment in pursuance of a resolution of either House of Parliament.

(11) In this section “NICs decision” means a decision under section 8 of the Social Security Contributions (Transfer of Functions, etc) Act 1999 or Article 7 of the Social Security Contributions (Transfer of Functions, etc) (Northern Ireland) Order 1999 (SI 1999/671 ).

(12) In this section “relevant contributions” means the following contributions under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI) A 1992—

(a) Class 1 contributions;
(b) Class 1A contributions;
(c) Class 1B contributions;
(d) Class 2 contributions which must be paid but in relation to which section 11A of the Act in question (application of certain provisions of the Income Tax Acts in relation to Class 2 contributions under section 11(2) of that Act) does not apply.]
Annotations:

Amendments (Textual)

F9 S. 10A inserted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(17)