These Regulations amend the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) to provide that the qualifying amount of a tax redress payment, as defined in section 15(4) of the Finance Act 2024 (c. 3), will be disregarded in the calculation of earnings for the purpose of establishing liability to Class 1 National Insurance contributions.

Tax redress payments are made to members of affected pension schemes for Members of Parliament, Members of the Senedd and members of the Northern Ireland Assembly as a result of a rectification exercise conducted in connection with the transfer of members’ pension benefits from a final salary to a career average method of calculation, as compensation for an amount paid in respect of an income tax liability for any tax year that would not have arisen if the rectification exercise had been retrospective. The MPs’, Senedd and Assembly Pension Schemes (Tax) Regulations 2025 (S.I. 2025/52) exempt the qualifying amount of a tax redress payment from income tax and specify how the qualifying amount is to be calculated.

A Tax Information and Impact Note covering this instrument was published on 22nd November 2023 alongside the Autumn Statement and is available on the website at https://www.gov.uk/go vernment/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.