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Where Taxpayers and Advisers Meet
NIC regulations published
06/06/2008, by Sarah Laing, Tax News - PAYE and Payroll Taxes, National Insurance, NICs
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The Social Security (Contributions) (Amendment No 4) Regulations 2008 (SI 2008/1431) add to the provisions for what constitutes earnings for Class 1 NICs purposes.

The Regulations amend the Social Security (Contributions) Regulations 2001 to provide in Great Britain a disregard, in the computation of earnings for Class 1 National Insurance contributions, for any Up-Front Childcare Fund payment.

These regulations will come into force on 1 July 2008.

Lone parents moving into work often face up-front childcare costs, such as registration fees, advance payments and a deposit, before receiving any earnings. The level of these up-front costs required by childcare providers can act as a barrier to work. From July 2008, the Department for Work and Pensions will launch the Up-Front Childcare Fund for lone parents as a pilot, initially running in the six Jobcentre Plus Districts in London, to provide up-front financial support for childcare for those lone parents who meet the eligibility criteria.

The Government will make payments of Up-Front Childcare Fund payments directly to a lone parent’s childcare provider. The lone parent must have been receiving benefit for 6 months, be participating in the New Deal for Lone Parents and moving into work of at least 16 hours per week. Payments up to a maximum amount will only be made for childcare provided by registered or approved childcare providers for registration fees, deposits and advance payments.

Providing a disregard for Class 1 National Insurance liability in respect of Up-Front Childcare Fund payments will ensure that the financial support fully meets the up-front cost of childcare and will remove additional complexity for lone parents as they move into work.

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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