The Social Security (Contributions) (Amendment No. 3) Regulations 2007

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004: “the 2001 Regulations”) in consequence of the enactment of the National Insurance Contributions Act 2006 (c. 10: “the 2006 Act”). That Act provides, for the first time, for the making of regulations with retrospective effect in relation to national insurance contributions. Such regulations may be made by virtue of section 4B(2) of each of the Social Security Contributions and Benefits Act 1992 (c. 4) and the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (“the 1992 Acts”). These sections were inserted by sections 1 and 2 respectively of the 2006 Act.

Schedule 5 to the 2001 Regulations prescribes the form and manner of making an election in relation to national insurance contributions arising on securities options, restricted securities and convertible securities. Paragraph 3B(7B) of Schedule 1 to each of the 1992 Acts (inserted by sections 5(3) and 6(3) of the 2006 Act) preclude an election under those paragraphs having effect in relation to contributions, or parts of contributions, liability to which arises as a result of regulations being given retrospective effect. Schedule 5 to the 2001 Regulations is amended so that any new elections to transfer liability for secondary Class 1 contributions must contain .a statement to that effect.

Regulation 1 provides for citation, commencement and interpretation.

Regulation 2 makes the amendment to Schedule 5 to the 2001 Regulations, and contains a saving for the continuing effect of elections made before the coming into force of these Regulations.

These Regulations do not impose new costs on business.