NIM12022 | Class 1: Calculating Class 1 NICs for Directors: Annual earnings periods: Appointed or ceasing during a tax year

Regulation 8(2) and Regulation 8(3) of the Social Security (Contributions) Regulations 2001 (SSCR 2001) (SI 2001 No 1004)

Directors appointed during the tax year have a pro-rata earnings period. Under regulation 8(2), the pro-rata earnings period is the number of weeks left in the tax year from and including the week of appointment.

Under regulation 8(3), a person who is a director at the start of a tax year or ceases to be a director during the tax year has an annual earnings period for that tax year. The annual earnings period also remains if the company goes into liquidation. A tax year starts on 6 April and ends on the subsequent 5 April.

All pro-rata calculations for directors are based on 52 weeks even if there are 53 weeks in the year. However, if a director is appointed in tax week 53, the pro-rata earnings period is 1 week.