The Social Security (Contributions) Regulations 2001

Exception from Class 4 liability by reference to Class 1 contributions paid on earnings chargeable to income tax under Schedule D

94.—(1) Subject to paragraph (2), where in respect of earnings paid in any year of assessment an earner has or, but for regulation 85, would have paid Class 1 contributions and those earnings are chargeable to income tax under Schedule D, he shall be excepted from liability to pay contributions under section 15 of the Act on so much of his profits or gains for that year of assessment as exceed the smaller of the two money sums specified in section 15(3) of the Act(1) and do not exceed the greater of those two money sums and equal—

(a) in the case of an earner who has or, but for regulation 85, would have paid Class 1 contributions at the normal rate, the value of Class 1 contributions so paid or which, but for that regulation, would have been paid, multiplied by 100 and divided by the figure of the primary percentage;

(b) in the case of an earner who has or, but for that regulation, would have paid Class 1 contributions at the reduced rate (within the meaning of regulation 126), the value of the Class 1 contributions so paid or which, but for regulation 85, would have been paid, multiplied by 100 and divided by the figure of the reduced rate;

(c) in the case of an earner who has or, but for that regulation, would have paid Class 1 contributions at the contracted-out rate, the value of the Class 1 contributions so paid or which, but for that regulation, would have been paid, multiplied by 100 and divided by the figure of the contracted-out rate.

(2) It shall be a condition of exception from liability that the earner makes an application for such an exception to the Board before the beginning of the year of assessment to which the application relates, or before such later date as the Board may allow.

(3) An application under paragraph (2) shall be made in such manner as the Board may direct and, for the purpose of enabling the Board to determine whether the earner is entitled to the exception, the earner shall furnish the Board with such information and evidence as the Board may require, whether the requirement is made at the time of the application or later.

(4) Without prejudice to the earner’s right to any such exception, nothing in paragraphs (1) to (3) shall affect the Board’s powers under regulation 95 to defer, pending the determination of the application, the earner’s liability under section 15 of the Act.

(1)

Section 15(3) is amended by article 5 of S.I. 2001/477.