The Social Security (Contributions and Credits) (Transitional and Consequential Provisions) Regulations 1985

Transitional provisions for the assessment of Class 1 contributions

2.—(1) This regulation applies in the case of a person—

(a) who on 6th October 1985 is a director of a company and has been such a director continuously since 6th April 1985 and in respect of whose earnings, by virtue of regulation 6A(1) and (3) of the principal regulations, the earnings period is the year commencing 6th April 1985; or

(b) who on or after 6th October 1985 is a director of a company and in respect of whose earnings the earnings period falls to be determined in accordance with—

(i) regulation 6A(1) and (2), or

(ii) regulation 6A(1) and (3)

of the principal regulations, and which commenced during the period from 6th April 1985 to 5th October 1985; or

(c) who is a person whose earnings, by virtue of regulations 2, 3, 5A, 21 or 22 of the principal regulations, are assessed by reference to an earnings period which is the year commencing 6th April 1985; or

(d) who after 5th April 1985 but before 6th October 1985 ceased to be a director of a company and—

(i) in respect of whose earnings, by virtue of regulation 6A(1) and (3) of the principal regulations, the earnings period is the year commencing 6th April 1985, or

(ii) in respect of whose earnings, the earnings period is determined by virtue of regulation 6A(1) and (2) of the principal regulations,

and is paid earnings in respect of any employed earner's employment with that company at any time in the period from 6th October 1985 to 5th April 1986; or

(e) who—

(i) ceased to be a director of a company before 6th April 1985, and

(ii) in respect of whose earnings, by virtue of regulation 6A(1) and (5) of the principal regulations, the earnings period is the year commencing 6th April 1985, and

(iii) is paid earnings in respect of any period during which he was such a director at any time in the period from 6th October 1985 to 5th April 1986; or

(f) who—

(i) is a person whose earnings, by virtue of regulations 2, 3, 5A, 21 or 22 of the principal regulations, are assessed by reference to an earnings period which is the year commencing 6th April 1985, and

(ii) after 5th April 1985 but before 6th October 1985 ceased to be employed in the employment from which those earnings derived, and

(iii) is paid any such earnings in the period from 6th October 1985 to 5th April 1986.

(2) In a case to which this regulation applies no secondary Class 1 contribution shall be payable on such earnings as are paid within an earnings period specified in paragraph (1) above as exceed an amount which is the sum of—

(a) the equivalent amount for the upper earnings limit for that earnings period calculated in accordance with regulation 8 of the principal regulations, and

(b) half the amount whereby the earnings paid in the earnings period exceed that equivalent amount, disregarding any fraction of £1.

(3) Where the earnings period is the period mentioned in paragraph 1(a), (b)(ii), (c), (d)(i), (e) or (f) above, for the purposes of section 4(6B) and (6E) of the Act (incidence of Class 1 contributions)(1) the appropriate percentage rates shall be—

(a) where the earnings in that earnings period do not exceed £2859.95, in the case of primary and secondary Class 1 contributions, 5 per cent.;

(b) where the earnings in that earnings period exceed £2859.95 but do not exceed £4679.99, in the case of primary and secondary Class 1 contributions, 7 per cent.;

(c) where the earnings in that earnings period exceed £4679.99, in the case of primary Class 1 contributions, 9 per cent.;

(d) where the earnings in that earnings period exceed £4679.99 but do not exceed £6759.95, in the case of secondary Class 1 contributions, 9 per cent.;

(e) where the earnings in that earnings period exceed £6759.95, in the case of secondary Class 1 contributions, 10.45 per cent..

(4) Where the earnings period is the period mentioned in paragraph 1(b)(i) or (d)(ii) above, for the purposes of the said section 4(6B) and (6E) the appropriate percentage rate shall be obtained by dividing the amount of the earnings paid in the earnings period by the number of weeks therein and by applying the quotient as if it were a payment of weekly earnings.

(1)

1975 c. 14; section 4(6B) and (6E) was inserted by section 7(2) of the Social Security Act 1985 (c.53).