Explanatory note

These Regulations amend the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) (the “SSCR Regulations”).

Regulation 2 introduces the amendments to the SSCR Regulations.

Regulation 3 inserts a new regulation 22C in the SSCR Regulations.

New regulation 22C(1) stipulates how a specified sub-category of amounts which count as employment income of an employed earner by virtue of Chapter 2 of Part 7A of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) are to be treated for the purposes of Part 1 of both the Social Security Contributions and Benefits Act 1992 and the Social Security Contributions and Benefits (Northern Ireland) Act 1992. The specified sub-category is amounts that count as employment income of the employed earner by virtue of Chapter 2 of Part 7A of ITEPA 2003 as a result of the operation of paragraph 1 of Schedule 11 (employment income provided through third parties: loans etc outstanding on 5 April 2019) to the Finance (No. 2) Act 2017. New regulation 22C(1) makes clear that these amounts should be treated as being paid to or for the benefit of the employed earner in respect of the employed earner’s employment as at the time the relevant step is treated as being taken under paragraph 1(2) of Schedule 11 to the Finance (No. 2) Act 2017.

New regulation 22C(2) applies the meaning of “relevant step” in Part 7A of ITEPA 2003 to the references to “relevant step” in new regulation 22C(1).

A Tax Information and Impact Note has not been prepared for this Instrument as it contains no substantive changes to tax policy.