The Social Security (Contributions) (Amendment No. 6) (Northern Ireland) Regulations 2000

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Social Security (Contributions) Regulations (Northern Ireland) 1979 (S.R. 1979 No. 186) (“the principal Regulations ”) to make provision for enterprise management incentives under Schedule 14 to the Finance Act 2000 (c. 17) and approved employee share ownership plans under Schedule 8 to that Act.

Regulation 1 provides for the citation and commencement of these Regulations.

Regulation 2 provides a definition of “the principal Regulations” and regulation 3 introduces the amendments made to the principal Regulations.

Regulation 4 amends the definition of “readily convertible asset” used in the principal Regulations to secure consistency of approach between income tax chargeable under Schedule E and contributions in respect of shares held subject to an approved employee share ownership plan.

Regulation 5 substitutes for the existing regulations 17A and 17AB of the principal Regulations a new regulation 17A which specifies certain amounts which are to be treated as earnings for the purposes of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7). In addition to sums payable to directors and payments by way of conditional acquisition of shares and convertible shares (now covered by paragraphs (2) and (3) of the replacement regulation 17A), payments in respect of which income tax is chargeable under Schedule 8 to the Finance Act 2000 (c. 17) to Schedule E and deductible under PAYE regulations are brought within the charge to social security contributions.

Regulation 8(2)(a) and (3) amends regulation 19 of the principal Regulations (sums to be disregarded in computing earnings-related contributions) to secure the disregard, in computing the amount of employed earner’s earnings, of payments (a) by way of the grant of a qualifying option under Schedule 14 to the Finance Act 2000 (enterprise management incentives) which is capable of being exercised more than ten years after the grant; or (b) deducted under an employee share ownership plan and of payments by way of an award of shares under an employee share ownership plan approved under Schedule 8 to that Act.

Regulation 6 consequentially revokes regulation 17AB of the principal Regulations (covered by the new regulation 17A(3)), whilst regulations 7, 8(2)(b) and (c), 9 and 10 contain consequential amendments.