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Peter Arrowsmith, FCA, has an update on recent NIC matters, and points out that - for now at least - the "holiday stamp" is still available for some.

EC Regulations Amended

The EC Regulations 883/2004 and 987/2009 have been amended with effect from 28 June 2012 by EC Regulation 465/2012. The main changes are as follows:

• the rules for aircrew are amended, along with the application of Council Reg 3922/1991 for social security purposes, with the intention of preventing avoidance,
• Article 13 of the 2004 Reg is replaced to make clearer the position where work is undertaken in more than one Member State – whether for the same employer or for two or more employers,
• a transitional rule so that where a person’s liability which fell in one State prior to these changes now falls in a different State, the liability will remain as under the old legislation until circumstances change, or for a maximum of 10 years, or unless the employee (not the employer(s)) elects otherwise. An election takes effect on the first day of the next calendar month unless made on or before 29 September 2012 in which case it is deemed to have taken effect on 28 June 2012.

HM Revenue and Customs has Issued a Note about the aircrew changes - National Insurance: New EU Rules for Flight and Cabin Crew Working in Two or More Member States - and says that a change of circumstances could be a change of the employer, the ‘home base’ or the Member State of residence.

EEA Members Join the Club

HM Revenue and Customs has also advised that the ‘new’ EC Regulations 883/2004 and 987/2009 now apply in the cases of Norway, Iceland and Liechtenstein with effect from 1 June 2012. The announcement was not made until 26 June, though that is probably the fault of the European Union rather than HMRC.

There is a transitional provision (which works like the case of the Reg 465/2012 changes mentioned above), though as far as HMRC reports only where there is a change of circumstance. Maybe more detail will flow on this from the EU (e.g., possibly an option for the employee to elect) and if so I’ll let you know in my next distribution.

ITV Case - NIC for Entertainers

HMRC has issued another Brief (Brief 19/12) on entertainers and the ITV Services case, this time following its success at the Upper Tribunal that I reported in hNIC Update - March 2012. See Revenue & Customs Brief 19/12. I understand that ITV is considering whether to appeal the UT decision.

NIC is Due on FURBS

In HMRC v Forde and McHugh Ltd (EWCA Civ 692) the Court of Appeal found in favour of HMRC, holding that Class 1 contributions are due on Funded Unapproved Retirement Benefit Scheme payments made in 2002 in the form of gilts. This reverses the decision in the Upper Tribunal – see my report on this in NIC Update - April 2011.

No Class 3 Refund

Following from the Upper Tribunal case of Bonner and others v HM Revenue and Customs, Robert Pages (TC 2007) failed at the First-tier Tribunal to get a refund of Class 3 contributions paid from 2002 to May 2006 – when the Pensions White Paper proposing the reduction in qualifying years to 44 (for men) was issued. He had stopped work in 2002 with less than 44, but more than 30, years on his record. Hindsight is a wonderful thing!

TIP OF THE MONTH - Holiday Stamp Schemes

It is still possible in the building and construction trades to use the ‘holiday stamp’ schemes, an effect of which is that neither the cost of the ‘stamps’ themselves nor the holiday payments from the fund provider (even if routed through the employer for the convenience of the employee and others) attract employer or employee National Insurance.

An equivalent relief across all other trades was abolished in October 2007.

This month’s tip is simply an early reminder that even this limited remaining relief is abolished as regards payments made on and after 31 October 2012.

For the benefit of anyone who wants to try to be clever, remember that there are rules regarding what are known as ‘mistimed payments’ so as to treat them as made at the usual time if they are advanced or delayed.

The above is taken from 'NIC Newsletter' (01/07/2012), and is reproduced with the kind permission of Peter Arrowsmith FCA, who retains the copyright.