4 Insertion of Part IIB into the principal Regulations
After regulation 22H (calculation of Class 1A contributions), insert—

“PART IIB CALCULATION OF, AND EXCEPTION FROM, LIABILITY FOR CLASS 1B CONTRIBUTIONS

22I Calculation of Class 1B contributions
Where a person is liable to pay a Class 1B contribution in accordance with the provisions of section 10A of the Social Security Contributions and Benefits Act 1992 (Class 1B contributions), the amount of that contribution shall be calculated to the nearest £0.01 and any amount of £0.005 or less shall be disregarded.

22J Exception from liability to pay Class 1B contributions
1 A person shall be excepted from liability to pay a Class 1B contribution for any year in respect of—
(a) the amount of any of the chargeable emoluments under section 10A(4) of the Social Security Contributions and Benefits Act 1992 of an employee included in a PAYE settlement agreement; and
(b) the total amount of income tax in respect of which that person is accountable to the Board of Inland Revenue in relation to emoluments of such an employee in accordance with a PAYE settlement agreement,
where the employee is—
(i) subject to the legislation of a contracting party, other than the United Kingdom, to the Agreement on the European Economic Area signed at Oporto on 2nd May 1992 as adjusted by the Protocol signed at Brussels on 17th March 1993, or
OJNo. L1, 3.1.1994, p. 7.
(ii) a person subject to the legislation of a country outside the United Kingdom in respect of whom there is an Order in Council under section 179 of the Social Security Administration Act 1992 (reciprocal agreements with countries outside the United Kingdom) giving effect to a reciprocal agreement.
Section 179 was amended by paragraph 70 of Schedule 2 to, the Jobseekers Act 1995 (c. 18).
2 Where under the foregoing provisions of this regulation, a person is excepted from liability to pay a Class 1B contribution for any year, that person shall be entitled, if he so wishes, to pay that contribution for that year.”

.
Regulation 22H was inserted by regulation 7 of S.I. 1998/2211.