The Social Security (Contributions) Amendment (No.4) Regulations 1991

Explanatory Note

(This note is not part of the Regulations)

These Regulations further amend the Social Security (Contributions) Regulations 1979 (“the principal Regulations”) to allow employers to pay earnings-related contributions to the Inland Revenue quarterly in certain circumstances, instead of monthly. The circumstances are where the employer has reasonable grounds for believing that, in the current income tax year, his average monthly payment to the Collector of Taxes will be less than £400 in the total amount in respect of–

(a) earnings-related contributions,

(b) income tax deducted under the Income Tax (Employments) Regulations 1973 (“the Income Tax Regulations”, providing for the “PAYE” scheme), and

(c) any deduction imposed by section 559 of the Income and Corporation Taxes Act 1988 on payments to sub-contractors in the construction industry.

These Regulations make amendments to Schedule 1 to the principal Regulations, which applies certain provisions of the Income Tax Regulations to earnings-related contributions under the Social Security Act 1975. The amendments made by these Regulations are consequential on amendments made to the Income Tax Regulations by the Income Tax (Employments) (No.21) Regulations 1991 (S.I. 1991/1080).

Regulation 2(2) of these Regulations inserts definitions of “income tax period” and “income tax quarter” in Regulation 2(1) in Schedule 1 to the principal Regulations.

Regulation 2(3) of these Regulations substitutes new Regulations 26, 26A and 26B for the former Regulation 26 in Schedule 1. The new Regulation 26 contains the basic rule, as provided by the former Regulation 26(1), that an employer shall pay earnings-related contributions to the Collector monthly. Regulation 26A contains the new provision allowing an employer to pay those contributions quarterly in the circumstances described above. Regulation 26A(1)(b) contains a specific provision for quarterly payment as provided by the former Regulation 26(1)(b). Regulation 26B contains further provisions applying to the payment of earnings-related contributions, whether paid monthly or quarterly, as provided by the former Regulation 26(2) and (3).

Regulation 2(4) to (7) of these Regulations makes consequential amendments to Regulations 27, 27A, 28 and 32 in Schedule 1, to extend the application of those provisions to employers paying quarterly.