NIM13050 | Class 1A National Insurance contributions: Liability for Class 1A NICs: Conditions to be satisfied for liability to arise: Employed earner’s employment

Section 10(1)(b) of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)

For Class 1A NICs liability to arise the person in receipt of a benefit in kind must be in employed earner’s employment. An employed earner is defined in section 2(1)(a) of the SSCBA 1992.

In the majority of cases it will be clear whether the worker receiving a benefit in kind is:

• an employee, office holder or agency worker with general earnings chargeable to income tax under Income Tax (Earnings and Pensions) Act 2003; or

• a self-employed earner, section 2(1)(b) of the SSCBA 1992.

Usually, it is unnecessary to carry out enquiries about the employment status of a worker receiving benefits. Where there is any doubt detailed enquires may need to be made. Guidance on employed earner’s employment is contained in the Employment Status Manual.

Class 1A NICs are not payable in respect of benefits provided to self-employed earners but see NIM13120 where a self-employed earner provides benefits to an employee.