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Where Taxpayers and Advisers Meet
NIC regulations published
03/04/2007, by Sarah Laing, Tax News - PAYE and Payroll Taxes, National Insurance, NICs
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Regulations have been published, which ensure that payments to employees involving employment-related securities are treated as earnings for NIC purposes.

The Social Security (Contributions) (Amendment No.2) Regulations 2007 (SI 2007/1057) come into force on 6 April 2007.

Payments to employees involving employment-related securities which avoid income tax and National Insurance Contributions (NICs) are treated as employment income for tax purposes by provisions in Finance (No.2) Act 2005 and Finance Act 2006. The provisions in both Finance Acts are retrospective to 2 December 2004.

SI 2007/1057 ensures that the payments to employees are similarly retrospectively treated as earnings and create a National Insurance liability on those payments.

The National Insurance Contributions Act 2006 includes the necessary powers to make retrospective contributions regulations which mirror retrospective tax legislation. This is necessary because Finance Acts cannot include National Insurance provisions.

Link

Statutory Instrument 2007/1057

About The Author

Sarah Laing
Editor, TaxationWeb News

Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences).

Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession.

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