NIM12010 | Class 1: Calculating Class 1 NICs for Directors: Fees received by professional partnerships and other companies: Definition of company

Regulation 27(5) of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Regulation 27(1) of SSCR 2001 refers to payments by a company, to or for the benefit of a director, that can be excluded from Class 1 NICs liability. “Company” is defined in regulation 27(5) as having the meaning given by section 832(1) and (2) Income and Corporation Taxes Act 1988 and Part 2 of Schedule 1 to Income Tax (Earnings and Pensions) Act 2003. This means that a company includes:

• any body corporate, or

• unincorporated association

but excludes a partnership, local authority or local authority association.

This is a much wider definition than that in regulation 1(2) SSCR 2001, NIM12001, so that payments to directors of Building Societies or Unit Trusts can be excluded from Class 1 NICs if the other conditions are satisfied.