Search Legislation

The Social Security (Contributions) (Amendment No. 3) Regulations 2009

 Help about what version

What Version

 Help about advanced features

Advanced Features

 Help about opening options

Opening Options

Changes over time for: Section 6

 Help about opening options

Alternative versions:

Changes to legislation:

There are currently no known outstanding effects for the The Social Security (Contributions) (Amendment No. 3) Regulations 2009, Section 6. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

Insertion of regulations 87A to 87G

This section has no associated Explanatory Memorandum

6.  After regulation 87 insert—

Notification of commencement or cessation of payment of Class 2 or Class 3 contributions on or after 6th April 2009

87A.(1) A person (P) to whom paragraph (2) applies shall immediately notify the relevant date to HMRC in writing or by such means of electronic communications as may be approved.

(2) This paragraph applies where P on or after 6th April 2009—

(a)becomes, or ceases to be, liable to pay a Class 2 contribution;

(b)becomes, or ceases to be, entitled to pay a Class 2 contribution although not liable to do so; or

(c)is entitled to pay a Class 3 contribution and wishes either to do so or to cease doing so.

(3) In paragraph (1) “the relevant date” means—

(a)in relation to a person to whom paragraph (2)(a) applies, the date on which P commences or ceases to be a self-employed earner;

(b)in relation to a person to whom paragraph (2)(b) or (c) applies, the date on which P wishes to commence or cease paying either Class 2 or Class 3 contributions, as the case may be.

(4) P is to be treated as having immediately notified HMRC in accordance with paragraph (1) if P has notified HMRC within such further time, if any, as HMRC may allow.

Penalty for failure to notify

87B.(1) A penalty is payable by P where—

(a)P becomes liable to pay a Class 2 contribution;

(b)P fails to comply with the requirement to notify in accordance with regulation 87A(1); and

(c)notification has not been made by 31st January following the end of the year M1 in which P became liable to pay a Class 2 contribution.

(2) A failure by P to comply with the requirement to notify is—

(a)“deliberate and concealed” if the failure is deliberate and P makes arrangements to conceal the situation giving rise to the requirement, and

(b)“deliberate but not concealed” if the failure is deliberate but P does not make arrangements to conceal the situation giving rise to the requirement.

(3) The penalty payable under paragraph (1) is—

(a)for a deliberate and concealed failure to comply with the requirement to notify, 100% of the lost contributions,

(b)for a deliberate but not concealed failure to comply with the requirement, 70% of the lost contributions, and

(c)for any other case, 30% of the lost contributions.

(4) “The lost contributions” are the amount of Class 2 contributions which P is liable to pay—

(a)beginning on the date on which P becomes liable to pay a Class 2 contribution, and

(b)ending on the 31st January preceding the day on which HMRC received notification of, or otherwise became fully aware of P's liability to pay Class 2 contributions.

(5) When calculating the amount of “the lost contributions” no account is to be taken of any Class 2 contribution—

(a)that is unpaid after the end of the sixth year following the year in which liability for that contribution arose, or

(b)in respect of which P's earnings meet the conditions set out in regulation 45(1) for the purposes of section 11(4) of the Act M2 (exception from liability for Class 2 contributions on account of small earnings).

(6) Liability to a penalty under paragraph (1) does not arise in relation to a failure to comply with the requirement to notify which is not deliberate if P satisfies HMRC or (on appeal) the tribunal that there is a reasonable excuse for the failure.

(7) For the purposes of paragraph (6)—

(a)an insufficiency of funds is not a reasonable excuse unless attributable to events outside P's control,

(b)where P relies on any other person to notify HMRC, that is not a reasonable excuse unless P took reasonable care to avoid the failure,

(c)where P had a reasonable excuse but the excuse has ceased, P is to be treated as having continued to have that excuse if P notifies without unreasonable delay after the excuse ceased.

(8) For the purposes of this regulation, the reference to a failure by P includes a failure by a person who acts on P's behalf; but P is not liable to a penalty in respect of a failure by P's agent where P satisfies HMRC or (on appeal) the tribunal that P took reasonable care to avoid the failure.

Disclosure

87C.(1) Regulation 87D makes provision for the reduction of a penalty where P discloses a failure to comply with the requirement to notify.

(2) P discloses a failure to comply with the requirement to notify by—

(a)telling HMRC about it,

(b)giving HMRC reasonable help in quantifying the contributions unpaid by reason of it, and

(c)allowing HMRC access to records for the purpose of checking the amount of contributions so unpaid.

(3) Disclosure of a failure to comply with the requirement to notify—

(a)is “unprompted” if made at a time when the person making it has no reason to believe that HMRC have discovered or are about to discover the failure to comply with the requirement to notify, and

(b)otherwise, is “prompted”.

(4) In relation to disclosure “quality” includes timing, nature and extent.

Reduction of penalty for disclosure

87D.(1) Where P, who would otherwise be liable to a 100% penalty has made an unprompted disclosure, HMRC shall reduce the 100% to a percentage not below 30%, which reflects the quality of the disclosure.

(2) Where P, who would otherwise be liable to a 100% penalty has made a prompted disclosure, HMRC shall reduce the 100% to a percentage, not below 50%, which reflects the quality of the disclosure.

(3) Where P, who would otherwise be liable to a 70% penalty has made an unprompted disclosure, HMRC shall reduce the 70% to a percentage, not below 20%, which reflects the quality of the disclosure.

(4) Where P, who would otherwise be liable to a 70% penalty has made a prompted disclosure, HMRC shall reduce the 70% to a percentage not below 35%, which reflects the quality of the disclosure.

(5) Where P, who would otherwise be liable to a 30% penalty has made an unprompted disclosure, HMRC shall reduce the 30%—

(a)if HMRC become aware of the failure to notify less than 12 months after 31st January following the end of the year during which a person became liable to pay a Class 2 contribution, to a percentage (which may be 0%), or

(b)in any other case, to a percentage not below 10%,

which reflects the quality of the disclosure.

(6) Where P, who would otherwise be liable to a 30% penalty has made a prompted disclosure, HMRC shall reduce the 30%—

(a)if HMRC become aware of the failure to notify less than 12 months after the 31st January following the end of the year during which a person became liable to pay a Class 2 contribution, to a percentage not below 10%, or

(b)in any other case, to a percentage not below 20%,

which reflects the quality of the disclosure.

Special reduction

87E.(1) If HMRC think it right because of special circumstances, they may reduce a penalty under regulation 87B(1).

(2) In paragraph (1) “special circumstances” does not include P's ability to pay.

(3) In paragraph (1) the reference to reducing a penalty includes a reference to—

(a)staying a penalty, and

(b)agreeing a compromise in relation to proceedings for a penalty.

Notice of decision etc.

87F.(1) Where P becomes liable for a penalty in accordance with regulation 87B(1) an officer of Revenue and Customs M3 shall—

(a)make a decision in accordance with section 8(1)(k)(ii) of the Transfer Act M4;

(b)notify P; and

(c)state in the notice of decision the amount of the penalty imposed and the period to which it relates.

(2) The penalty referred to in regulation 87B(1)—

(a)must be paid before the end of the period of 30 days beginning with the date of the issue of the notice of decision; and

(b)shall be recoverable as if it were a Class 2 contribution due and payable.

(3) A notice of decision must be issued before the end of the period of 12 months beginning with—

(a)where there has been a decision that P was liable to pay Class 2 contributions and a determination of the amount P was or is liable to pay, the end of the appeal period; or

(b)if there is no such decision, the date on which the contributions unpaid by reason of the failure to notify are finally determined.

(4) In paragraph (3)(a) “appeal period” means the period during which—

(a)an appeal could be brought, or

(b)an appeal that has been brought has not been determined or withdrawn.

(5) A notice of decision under paragraph (1), may be combined with an assessment issued in accordance with paragraph 16 of Schedule 41 to the Finance Act 2008 M5.

Double jeopardy

87G.  P is not liable to a penalty under regulation 87B(1) in respect of a failure or action in respect of which P has been convicted of an offence..

Marginal Citations

M1Regulation 1(2) of the Social Security (Contributions) Regulations 2001 defines “year” as meaning “tax year”.

M2Regulation 1(2) of the Social Security (Contributions) Regulations 2001 provides that “the Act” means the Social Security and Contributions and Benefits Act 1992.

M3Section 7 of the Commissioners for Revenue and Customs Act 2005 (c. 11) provides that a function conferred on an Officer of the Board of Inland Revenue vests in an officer of Revenue and Customs.

M4Regulation 1 of the Social Security (Contributions) Regulations 2001 provides that the Transfer Act means the Social Security Contributions (Transfer of Functions, etc) Act 1999; regulation 156 of those Regulations provides that a provision of an enactment which applies only to Great Britain shall be construed so far as necessary as including a reference to the corresponding enactment applying in Northern Ireland.

Back to top

Options/Help

Print Options

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Memorandum

Explanatory Memorandum sets out a brief statement of the purpose of a Statutory Instrument and provides information about its policy objective and policy implications. They aim to make the Statutory Instrument accessible to readers who are not legally qualified and accompany any Statutory Instrument or Draft Statutory Instrument laid before Parliament from June 2004 onwards.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as made version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources