NIM01510 - Class 1 Structural Overview: zero-rate of secondary NICs for Freeport and Investment Zone special tax site employees: qualifying employers
National Insurance Contributions Act (NICA) 2022
Section 113 of the Finance Act 2021
Schedule 23 to the Finance (No. 2) Act 2023
NICA 2022 introduced the zero-rate of secondary Class 1 NICs for Freeport employers with effect from 6 April 2022.
Schedule 23 to the Finance Act (No 2) 2023 amended NICA 2022 to extend the zero-rate of secondary Class 1 NICs to employers in a designated special tax site within an Investment Zone.
This relief is available in designated special tax sites across England, Scotland and Wales for eligible hires and employers can claim the relief for up to 36 months in respect of eligible employees hired between 6 April 2022 and:
- 30 September 2031 for English Freeport special tax sites, and
- 30 September 2034 for Scottish Green Freeport, Welsh Freeport and Investment Zone special tax sites
To qualify for the zero-rate of secondary Class 1 NICs, an employer must have business premises in a Freeport or Investment Zone special tax site.
- Section 113 of the Finance Act 2021 defines the meaning of Freeport or Investment Zone special tax site.
- Section 13 of NICA 2022 defines business premises as a building or structure out of which the employer’s business is carried out.
An employer who is a public authority is not a Freeport or Investment Zone employer and cannot claim the relief. A public authority is defined at section 13 of NICA 2022 as including any person whose activities involve the performance of functions (whether or not in the United Kingdom) which are of a public nature.
The zero-rate of secondary Class 1 NICs is payable only in respect of employees who meet the qualifying conditions as set out in section 2 of NICA 2022 – see NIM01515.