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The Social Security (Contributions) (Amendment) Regulations 2018

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Citation and commencement

1.  These Regulations may be cited as the Social Security (Contributions) (Amendment) Regulations 2018 and come into force on 6th April 2018.

2.  The Social Security (Contributions) Regulations 2001(1) are amended by Parts 1 to 3 of these Regulations.

PART 1Optional remuneration arrangements: consequential amendments

3.  In regulation 1 (citation, commencement and interpretation), after the definition of “official computer system” insert—

“optional remuneration arrangements” has the meaning given in section 69A of ITEPA 2003(2);.

4.  In regulation 22A (amounts to be treated as earnings in connection with the use of qualifying vehicles other than cycles), after paragraph (2) insert—

(2A) But the amount in paragraph (2) is taken to be RME (without the subtraction of QA) so far as the aggregate of relevant motoring expenditure is paid pursuant to optional remuneration arrangements..

5.—(1) Schedule 2 (calculation of earnings for the purposes of earnings-related contributions in particular cases) is amended as follows.

(2) After paragraph 14(1) insert—

(1A) This paragraph is subject to paragraph 14A (valuation of non-cash vouchers provided under optional remuneration arrangements)..

(3) After paragraph 14 insert—

Valuation of non-cash vouchers provided under optional remuneration arrangements

14A.(1) This paragraph applies for calculating the amount of earnings comprised in any payment by way of a non-cash voucher which falls to be taken into account in calculating an employed earner’s earnings, if this is made pursuant to optional remuneration arrangements.

(2) The amount of earnings is the relevant amount.

(3) To find the relevant amount, first determine which (if any) is the greater of—

(a)the chargeable expense (without taking account of the qualification in paragraph 14(3)); or

(b)the amount foregone.

(4) If the amount in sub-paragraph (3)(a) is greater than or equal to the amount foregone, the “relevant amount” is the chargeable expense (taking account of the qualification in paragraph 14(3)).

(5) Otherwise, “the relevant amount” is the difference between—

(a)the amount foregone; and

(b)any part of the chargeable expense that the employed earner makes good to the person incurring it.

(6) For the purposes of sub-paragraphs (3) to (5), assume that the amount in sub-paragraph (3)(a) is zero if the condition in sub-paragraph (7) is met.

(7) The condition is that the payment would be exempt from income tax but for section 228A(1) of ITEPA 2003(3).

(8) In this paragraph—

(a)“chargeable expense” has the meaning given in paragraph 14; and

(b)“amount foregone” means the amount foregone with respect to the benefit of the non-cash voucher for the purposes of the benefits code as mentioned in section 69B of ITEPA 2003(4).

(9) Where a payment by way of a non-cash voucher is made partly pursuant to optional remuneration arrangements and partly otherwise than pursuant to such arrangements, these Regulations are to apply with any modifications (including provision for just and reasonable apportionments) that may be required for ensuring that it is treated—

(a)in accordance with this paragraph so far as it is made pursuant to optional remuneration arrangements; and

(b)in accordance with any other treatment that is applicable so far as it is made otherwise than pursuant to such arrangements..

6.—(1) Part 8 of Schedule 3 (travelling, relocation and other expenses and allowances of the employment) is amended as follows.

(2) Renumber paragraphs 7 and 7A as paragraphs 7(1) and 7A(1) respectively.

(3) After paragraph 7(1) insert—

(2) Sub-paragraph (1) does not apply so far as the payment is made pursuant to optional remuneration arrangements..

(4) After paragraph 7A(1) insert—

(2) Sub-paragraph (1) does not apply so far as the payment of relevant motoring expenditure within the meaning of regulation 22A(3) is made pursuant to optional remuneration arrangements..

(5) For paragraph 9(2) substitute—

(2) Sub-paragraph (1) does not authorise the disregard of any amount by way of relevant motoring expenditure, within the meaning of paragraph (3) of regulation 22A—

(a)in excess of that permitted by the formula in paragraph (4) of that regulation; or

(b)so far as it is paid pursuant to optional remuneration arrangements..

PART 2Qualifying childcare vouchers: consequential amendments

7.—(1) Part 5 of Schedule 3 (certain non-cash vouchers to be disregarded as payments in kind) is amended as follows.

(2) In paragraph 6B, after sub-paragraph (b) insert—

(ba)“eligible employee” has the meaning given in section 270AA of ITEPA 2003(5);.

(3) In paragraph 7—

(a)in the heading and in sub-paragraph (9)(a), before “employees” insert “eligible”; and

(b)in sub-paragraph (1), before the first use of “employee” insert “eligible”.

(4) In paragraph 7A—

(a)in the heading and in sub-paragraph (9)(a), before “employees” insert “eligible”; and

(b)in sub-paragraph (1), before the first use of “employee” insert “eligible”.

PART 3Sporting testimonial payments

8.—(1) Regulation 40B (exception from liability to pay Class 1A contributions for tax year 2017-18 in respect of sporting testimonial payments) is amended as follows.

(2) In the heading omit “for tax year 2017-18”.

(3) In paragraph (1) after “for the tax year 2017-18” insert “and subsequent tax years”.

(4) In paragraph (2) omit “for the tax year 2017-18”.

Mark Spencer

David Rutley

Two of the Lords Commissioners of Her Majesty’s Treasury

31st January 2018

The Secretary of State concurs as indicated in the preamble.

Signed by authority of the Secretary of State for Work and Pensions.

Guy Opperman

Parliamentary Under-Secretary of State

Department for Work and Pensions

30th January 2018

The Department for Communities concurs as indicated in the preamble.

Sealed with the Official Seal of the Department for Communities on

Legal seal

Denis McMahon

A senior officer of the Department for Communities

30th January 2018

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