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Social Security (Contributions) (Amendment) Regulations SI 2018/120

Published Monday, March 12, 2018

The Social Security (Contributions) (Amendment) Regulations SI 2018/120 were laid on 1 February, and are to come into force from 6 April 2018.

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The regulations would make three changes to National Insurance contributions (NICs):

  • to align the NICs treatment of salary sacrifice schemes with the way these schemes are subject to income tax, following changes made to their tax treatment by Finance Act 2017.
  • to make consequential changes to the NICs treatment of childcare vouchers provided by an employer, in line with changes to the income tax treatment of employer supported childcare, to take effect from the 2018/19 tax year.
  • to ensure that employers continue to be exempted from having to pay Class 1A NICs where a sportsperson in their employ receives payments from a sporting testimonial organised by an independent committee. Employers’ potential liability to this NICs charge was an unintended consequence of a reform to the taxation of sporting testimonial payments in 2017, but the current statutory provision to ensure employers are not liable for this charge applies for the tax year 2017/18 only.

There has been quite a lot of comment, not about the regulations themselves, but about the policy underpinning the second of these changes – the Government’s decision to introduce a new scheme to support parents’ childcare costs - Tax Free Childcare - and to close employer-supported childcare (ESC) to new applicants from April 2018. This issue is examined at length in, Childcare Vouchers and Tax-Free Childcare - Frequently Asked Questions, Commons Briefing Paper CBP8055, 31 January 2018.

Commons Briefing papers CBP-8250

Author: Antony Seely

Topic: National insurance

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