National Insurance Act 1965

4 Graduated contributions by employed persons and employers.

(1) Subject to the provisions of this Act, where in any income tax week there is made to or for the benefit of a person over the age of eighteen a payment on account of his remuneration in any one employment of an amount exceeding nine pounds (or the equivalent amount for remuneration not paid weekly), then if the employment was an employed contributor's employment and is not at the time of the payment a non-participating employment and that person either is under pensionable age or has not retired from regular employment—

(a) he shall be liable to pay a graduated contribution based on that payment; and

(b) his employer in the employment shall be liable to pay such a contribution in respect of him; and

(c) the amount of the graduated contribution payable by each of them shall be four and a quarter per cent. of the amount, up to nine pounds, by which that payment exceeds nine pounds (or of the equivalent amount for remuneration not paid weekly).

(2) In relation to graduated contributions, references in this Act to remuneration shall be taken to include, and to include only, any emoluments assessable to income tax under Schedule E (other than pensions), being emoluments from which tax under that Schedule is deductible, but shall apply to a payment of any such remuneration whether or not tax in fact falls to be deducted from that payment.

(3) Except in so far as regulations otherwise provide, the graduated contributions payable in any income tax week in respect of a person's remuneration shall be determined—

(a) by aggregating, and treating as a single payment of remuneration in one employment, all payments made in that week on account of remuneration in the same employment, or in any two or more employments under the same employer, except any employment such that graduated contributions are not payable in respect of it;

(b) by apportioning between the employments any single payment of remuneration in two or more employments under different employers, and (subject to the foregoing paragraph) treating as separate payments the parts apportioned to each employment.

(4) Where a person in any income tax year is paid remuneration from two or more employments, and the graduated contributions paid by him in respect of that remuneration exceed the prescribed amount, the excess—

(a) shall for the purposes of the powers conferred by section 14 of this Act be treated as representing contributions of the wrong class paid in error; and

(b) shall for the purpose of any right under this Act to benefit be treated as not properly payable.

(5) For the purpose of graduated contributions, any sums deducted (whether for contributions, for income tax or otherwise) from any payment of remuneration which is or would but for the deduction be made shall, except in so far as regulations otherwise provide, be treated as paid on account of the remuneration; and for the purpose aforesaid any payment of remuneration shall be disregarded in so far as it is directed by regulations to be treated as coming from sums comprised in a previous payment of remuneration or to be otherwise excluded from the computation of a person's remuneration.

(6) Provision shall be made by regulations for determining the graduated contributions payable where the whole or part of a person's remuneration in any employment is not paid weekly (and accordingly for determining the equivalent amounts mentioned in subsection (1) of this section), and may include provision for modifying subsection (3) of this section; and regulations may also, for the purpose of graduated contributions, make provision as to the intervals at which a person's remuneration or any part of it is to be treated as paid where it is not all paid at the same intervals of a week or longer and in the amounts due for those or for corresponding intervals.

(7) Regulations may also in relation to graduated contributions make provision—

(a) for calculating the amounts payable according to a prescribed scale or otherwise adjusting them so as to avoid fractional amounts or otherwise facilitate computation ; and

(b) for requiring that the liability in respect of a payment made in an income tax week, in so far as it depends on any conditions as to a person's age or retirement, shall be determined as at the beginning of the week or as at the end of it; and

(c) for securing that liability is not avoided or reduced by an employer following in the payment of persons employed any practice which is abnormal for their employments.