The Social Security (Contributions) (Amendment No. 10) (Northern Ireland) Regulations 2000

These Regulations may be cited as the Social Security (Contributions) (Amendment No. 10) (Northern Ireland) Regulations 2000 and shall come into force on 10th October 2000.

Amend the Social Security (Contributions) Regulations (Northern Ireland) 1979^f1 in accordance with regulations 3 to 12.

In regulation 19 (payments to be disregarded) after paragraph (1)(zp)^f1 add—

“(zq)

a payment by way of the discharge of any liability for secondary Class 1 contributions which is transferred from the secondary contributor to the employed earner by an election made jointly by them for the purposes of paragraph 3B(1) of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992.”.

For the heading of regulation 46A^f1 substitute—

“Other methods of collection and recovery of earnings-related contributions”.

After regulation 46A insert—

“Transfer of liability from secondary contributor to employed earner: share option gains

46B

Schedule 1ZA to these Regulations contains provisions which have effect with respect to elections made jointly by a secondary contributor and an employed earner that the liability of the secondary contributor in respect of share option gains shall be transferred to the employed earner.”.

In Schedule 1 after Regulation 13 (calculation of deduction) insert—

“Records where liability transferred from secondary contributor to employed earner: share option gains

13ZA

(1)

Where an election has been made for the purposes of paragraph 3B(1) of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992, the secondary contributor shall maintain records containing—

(a)

a copy of any such election;

(b)

a copy of the notice of approval issued by the Commissioners of Inland Revenue under paragraph 3B(1)(b) of that Schedule; and

(c)

the information set out—

(i)

in paragraph (2) of this Regulation in respect of the company in respect of whose shares the share option to which the election relates is to be exercisable;

(ii)

in paragraph (3) of this Regulation in respect of the employed earner.

(2)

The information referred to in paragraph (1)(c)(i) of this Regulation is the name and address of the company.

(3)

The information referred to in paragraph (1)(c)(ii) of this Regulation is—

(a)

the name of the employed earner; and

(b)

the national insurance number allocated to the employed earner.”.

In Schedule 1 in Regulation 26A(3) (level below which an employer may choose to make payments to the Collector quarterly)^f1 for the definition of “N” substitute—

• “N is the amount which would be payable to the Collector under the Social Security Contributions and Benefits (Northern Ireland) Act 1992 and the Main Regulations disregarding—

  1. (a)

     any amount of secondary Class 1 contributions in respect of which liability has been transferred to the employed earner by virtue of an election made jointly by the employed earner and the secondary contributor for the purposes of paragraph 3B(1) of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (transfer of liability to be borne by earner); and

  2. (b)

     any adjustment to the amount so payable to the Collector under regulation 7(3) of the Tax Credits (Payments by Employers) Regulations 1999 (funding of payment by relevant employer or relevant subsequent employer of tax credit)^f2;”.

In Schedule 1 after Regulation 28D^f1 (remission of interest for official error) insert—

“Application of Regulations 26, 26B, 28, 28A, 28B, 28C and 28D where liability transferred from secondary contributor to employed earner: share option gains

28E

(1)

This Regulation applies where—

(a)

secondary Class 1 contributions are payable in respect of a gain which is treated by section 4(4)(a)^f2 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 as remuneration derived from an employed earner’s employment; and

(b)

an amount or proportion (as the case may be) of the liability of the secondary contributor to those contributions is transferred to the employed earner by an election made jointly by them for the purposes of paragraph 3B(1) of Schedule 1 to that Act.

(2)

Regulations 26, 26B^f3, 28^f4, 28A^f5, 28B^f6, 28C^f7 and 28D shall apply to the employed earner to the extent of the liability transferred by the election and, to that extent, those Regulations shall not apply to the employer.

(3)

For the purposes of paragraph (2) of this Regulation—

(a)

any reference in Regulations 26, 26B, 28, 28A, 28B and 28D to an employer, and

(b)

the reference in Regulation 28C to a secondary contributor,

shall be construed as a reference to the employed earner to whom liability is transferred by the election.”.

In Schedule 1 after Regulation 30 (return by employer at end of year) insert—

“Additional return by employer at end of year where liability transferred to employed earner: share option gains

30ZA

(1)

This Regulation applies where—

(a)

secondary Class 1 contributions are payable in respect of a gain which is treated by section 4(4)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 as remuneration derived from an employed earner’s employment; and

(b)

an amount or proportion (as the case may be) of the liability of the secondary contributor for those contributions is transferred to the employed earner by an election made jointly by them for the purposes of paragraph 3B(1) of Schedule 1 to that Act.

(2)

Not later than 92 days after the end of the year the employer shall deliver to the Inspector, in respect of each employed earner to whom any liability is transferred by the election, written particulars of the matters set out in paragraph (3) of this Regulation.

(3)

The matters set out in this paragraph are—

(a)

the amount of the contributions referred to in paragraph (1)(a) of this Regulation;

(b)

the amount of the transferred liability; and

(c)

the date on which payment of the amount of the transferred liability was made to the Collector.”.

In Schedule 1 in Regulation 32 (inspection of employer’s records) after paragraph (6)^f1 add—

“(7)

Where an election has been made jointly by the secondary contributor and the employed earner for the purposes of paragraph 3B(1) of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992, paragraphs (1) to (1B) of this Regulation shall apply to the records which the secondary contributor is obliged by Regulation 13ZA to maintain and, for the purposes of that paragraph, those records shall be retained by him throughout the period for which the election is in force and for six years after the end of that period.”.

After Schedule 1 insert the following Schedule—

“SCHEDULE 1ZA

ELECTIONS ABOUT SHARE OPTION GAINS

Regulation 46B

1

(1)

An election for the purposes of paragraph 3B(1) of Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 must contain—

(a)

details of the share options to which it relates, or of the period within which the share options to which it relates are intended to be granted;

(b)

a statement that the election relates to any gain on which the employed earner is liable to pay secondary Class 1 contributions under section 4(4)(a) of the Social Security Contributions and Benefits Act (Northern Ireland) 1992 and an explanation of the effect of that paragraph;

(c)

the amount or proportion (as the case may be) of the liability for secondary Class 1 contributions to be transferred;

(d)

a statement that its purpose is to transfer the liability for the secondary Class 1 contributions referred to in paragraph (c) from the secondary contributor to the employed earner;

(e)

a statement as to the method by which the secondary contributor will secure that the liability for amounts of contributions, transferred under the election, is met;

(f)

a statement as to the circumstances in which it shall cease to have effect;

(g)

a declaration by the employed earner that he agrees to be bound by its terms; and

(h)

evidence sufficient to show that the secondary contributor agrees to be bound by its terms.

(2)

The declaration referred to in sub-paragraph (1)(g) must either be signed by the employed earner or, if it is made by electronic communications, made by him in such electronic form and by such means of electronic communications as may be authorised by the Commissioners of Inland Revenue.

2

(1)

An election to which this Schedule applies must be made either in writing or in such electronic form and by such means of electronic communications as may be authorised by the Commissioners of Inland Revenue.

(2)

An election to which this Schedule applies may be contained in two documents, one made by the employed earner and the other by the secondary contributor, in which case—

(a)

the document made by the employed earner must contain the matters listed in paragraph 1(1)(a) to (g); and

(b)

the document made by the secondary contributor must contain the matters listed in paragraph 1(1)(a) to (f) and (h).

3

(1)

Where an election to which this Schedule applies has been made, the secondary contributor shall notify the employed earner to whom any of his liabilities are transferred by the election of—

(a)

any transferred liability that arises;

(b)

the amount of any transferred liability that arises; and

(c)

the contents of any notice of withdrawal by the Inland Revenue of any approval that relates to the election.

(2)

The secondary contributor shall notify the employed earner of the matters set out in sub-paragraph (1)(a) and (b) as soon as reasonably practicable.

(3)

The secondary contributor shall notify the employed earner of the matters set out in sub-paragraph (1)(c) within 14 days of receipt of the notice of withdrawal in question.

4

(1)

In this Schedule “electronic communications” has the meaning given by section 132(10) of the Finance Act 1999.

(2)

In this Schedule, unless the context otherwise requires—

(a)

a reference to a numbered paragraph is a reference to the paragraph of this Schedule bearing that number;

(b)

a reference in a paragraph to a numbered sub-paragraph is a reference to the sub-paragraph in that paragraph bearing that number; and

(c)

a reference in a sub-paragraph to a lettered paragraph is a reference to the paragraph in that sub-paragraph bearing that letter.”.

(This note is not part of the Regulations)