NIM13308 | Class 1A NICs: liability for Class 1A NICs: Class 1A NICs on sporting testimonials: benefit-in-kind provided with proceeds

If the testimonial committee provide the sportsperson with continuing use of a taxable benefit-in-kind that also gives rise to a Class 1A liability (such as a sponsor’s car), the P11D(b) process will apply to those Class 1A NICs liabilities. See NIM15000.

If the testimonial committee provide the sportsperson with a benefit (say, a car) which they are allowed to keep, then the value of the car is included in the testimonial award.

There is a hierarchy (order of priority) of payments so that if the sportsperson is given a cash payment in their testimonial and the provision of taxable BIK, both giving rise to a Class 1A liability, apply the £100,000 threshold to the cash element first.

Example

If the sportsperson receives £90,000 cash payment and BIK worth £20,000, then we set the £100,000 exemption against the cash element, leaving £10,000 exemption left to set against the BIK, whereby the actual amount then liable to Class 1A is £10,000 of the BIK.