The Social Security (Contributions) (Amendment No. 3) Regulations 2005

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004: “the principal Regulations”).

Regulation 1 provides for citation and commencement.

Regulation 2 introduces the amendments to the principal Regulations.

Regulation 3 amends the list of definitions in regulation 1 of the principal Regulations, inserting new definitions of “the acquired gender” and “full gender recognition certificate”.

Regulation 4 amends regulation 8 of the principal Regulations to make provision for the earnings periods of a person who was born a woman, is a company director, and is aged between 60 and 64 when a full gender recognition certificate is issued recognising the person’s gender as male.

Regulation 5 amends regulation 40 of the principal Regulations, bringing the treatment of childcare provision, for Class 1A National Insurance Contributions purposes more closely into line with the treatment for income tax purposes.

Regulation 6 amends regulation 49 of the principal Regulations to permit the payment of a Class 3 contribution in the case of a person who was born a woman and is aged between 60 and 64 when a full gender recognition certificate is issued recognising the person’s gender as male. The amendment permits the payment of Class 3 contributions for the years beginning with that in which the person reached the age of 60 and ending with the year in which the gender recognition certificate was issued.

Regulation 7 inserts a new regulation 65B into the principal Regulations. This prescribes that the amount of a Class 3 contribution paid by virtue of regulation 49(2B) of the principal Regulations (inserted by regulation 6(3) of this instrument) paid in the year in which a gender recognition certificate is issued or in the following year shall be the amount prescribed for the year to which the contribution relates.

Regulation 9 amends Schedule 3 to the principal Regulations. Paragraph (2) of the regulation substitutes a new paragraph 7 in Part 5 of that Schedule, bringing the treatment of qualifying childcare vouchers for contributions purposes into line (so far as practicable) with their treatment for tax purposes. Paragraph (3) adds a reference to double taxation convention with the United States to the list of such conventions under which contributions to pension schemes are disregarded for National Insurance contributions purposes.

Regulation 10 makes transitional provision in respect of the introduction of the new treatment of qualifying childcare vouchers.

Regulation 11 revokes a previous amendment to paragraph 7 of Part 5 of Schedule 3 to the 2001 Regulations.

A full regulatory impact assessment in respect of the childcare aspects of these Regulations was prepared by the Inland Revenue in April 2004 and is available on the Inland Revenue website at http://www.inlandrevenue.gov.uk/ria/emp-supp-childcare.pdf. The other provisions of these Regulations do not impose new costs on business.