NIM01525 - Class 1 Structural Overview: zero-rate of secondary NICs for Freeport and Investment Zone employees: exemptions due to protected characteristics

The Social Security Contributions (Freeports) Regulations 2022

The National Insurance Contributions Act 2022 (Freeports and Investment Zones) (Consequential Amendments) Regulations 2023 

The 60% rule is that at the time the qualifying period begins, the employer reasonably expects that 60% or more of the earner’s employed time during that period will be spent in a single Freeport or Investment Zone special tax site in which the employer has business premises (see NIM01520).

An employee who does not meet the 60% rule cannot have the relief claimed in relation to them.

However, the 60% rule is treated as met in respect of a qualifying period where regulation 3 or 4 of The Social Security Contributions (Freeports) Regulations 2022, as amended by regulation 3 of The National Insurance Contributions Act 2022 (Freeports and Investment Zones) (Consequential Amendments) Regulations 2023, applies.

Where the earner has the protected characteristic of disability  (as defined in section 6(1) of the Equality Act 2010) then the 60% rule is treated as met if the employer has made adjustments to the time the employed earner spends in the Freeport or Investment Zone special tax site and the 60% rule would be met but for the adjustments.

Where the earner is pregnant or within a period of maternity then the 60% rule is also treated as met if the employer has made adjustments to the time the employed earner spends in the Freeport or Investment Zone special tax site because of this and the 60% rule would be met but for the adjustments. This is also the case if the adjustments are made because of illness suffered by the earner as a result of that pregnancy or period of maternity.

For the purposes of the zero-rate of secondary NICs for Freeport or Investment Zone employees, a period of maternity means 52 weeks beginning with the day on which the earner gives birth.