Explanatory note

The regulations contained in this instrument are made by virtue of, or consequential upon, amendments made to the Social Security Contributions and Benefits Act 1992 (c. 4) and the Social Security Administration Act 1992 (c. 5) by the Social Security Act 1998 (c. 14). This instrument is made before the end of the period of 6 months beginning with the coming into force of sections 56(2), 57 and 60 of the Social Security Act 1998 on 4th March 1999. The Regulations are therefore exempt, by virtue of section 173(5)(b) of the Social Security Administration Act 1992 from reference to the Social Security Advisory Committee and have not been so referred.

These Regulations make further amendments to the Social Security (Contributions) Regulations 1979 (“the principal Regulations”).

Regulation 2 substitutes regulation 47 of the principal Regulations to make provision for the payment of a Class 1A contribution direct to the Inland Revenue rather than through the provisions of Schedule 1 to the principal Regulations (PAYE/contributions returns). The new provisions in regulations 47 to 47K provide for, inter alia, the payment of, and accounting to the Inland Revenue of such contributions, the charging of interest and the imposition of penalties in respect of their non-payment or late payment and interest on refunds of such contributions.

Regulation 3 substitutes regulation 132 of the principal Regulations to provide, subject to specified exceptions, a penalty of £100 for each contravention of, or failure to comply with, any provision of the principal Regulations and for the recovery and remission of that penalty by the Inland Revenue.

The costs to business of these amendments were covered in the Regulatory Impact Assessment for the Social Security Act 1998 in accordance with, and in consequence of which, these Regulations are made. That Assessment concluded that no costs would be imposed on compliant businesses as penalties would only be imposed on non-compliant ones. A copy of that Regulatory Impact Assessment has been placed in the libraries of both Houses of Parliament and can be obtained from the Department of Social Security, Better Regulation Unit, 3rd Floor, The Adelphi, 1—11 John Adam Street, London WC2N 6HT.