NIM13150 - Class 1A National Insurance contributions: liability for Class 1A NICs: table of common benefits liable for Class 1A NICs
The table below lists what are likely to be the most commonly provided benefits. The purpose of the table is to indicate whether Class 1 or Class 1A NICs are due in particular cases. The amount of Class 1A NICs due is based upon the amount of general earnings calculated under ITEPA 2003. Guidance on calculating the income tax on these benefits/payments can be found in the Employment Income Manual (EIM). The table also provides references to additional NIM guidance where special Class 1A NICs rules apply.
The table is not exhaustive but provides what are likely to be the most commonly provided benefits. Remember that individual circumstances or facts surrounding a particular benefit may influence the class of NICs due. In most cases the arrangements put in place by an employer to supply the employee with a benefit will determine whether Class 1 or Class 1A NICs are due. In some instances the ‘circumstances’ box of the table will indicate whether the contract to supply the goods or services is with the employer or the employee. See NIM13170 for the importance of this distinction for NICs.
When you use this table you should refer to the references given for the NIM and the EIM to ensure that you treat the payment correctly.
Type of benefit | Circumstances of provision | Class 1 liability | Class 1A liability | National Insurance Manual | Employment Income Manual |
---|---|---|---|---|---|
Assets placed at the employee’s disposal by the employer | Provided for business use and private use is not significant – except motor vehicles, boats and aircraft | No | No | NIM02020 | EIM21611; EIM21614; EIM21630 |
Provided for mixed business and private use | No | Yes | NIM02020; NIM05010 | EIM21611; EIM21614; EIM21630 | |
Assets transferred to the employee but not Readily Convertible Assets | Can be turned into cash only by sale, such as furniture, kitchen appliances, property and clothes | No | Yes | NIM02020 | EIM21640 |
Car fuel for private motoring in a provided car | Any means of supply or purchase, except round sum allowances | No | Yes | NIM16175 | EIM25550 |
Car fuel for private motoring in a privately owned car | Supplied using cash, a company credit card, garage or agency card and the litany is used | No | Yes | NIM02020; NIM05800; NIM06051; NIM16170 | EIM21640 - provision of fuel; EIM16010 - credit tokens |
Supplied using cash, a company credit card, garage or agency card and the litany not used | Yes | No | NIM02020; NIM05800; NIM06051; NIM16170 | EIM00520 - cash; EIM16010 - credit tokens | |
Supplied from employer’s own pump | No | Yes | NIM02020; NIM05800; NIM06051; NIM16170 | EIM21640 | |
Car parking facilities | At or near place of work | No | No | NIM05615 | EIM21685 |
Elsewhere – unless the parking is part of a journey which is qualifying business travel | No | Yes | NIM05615 | EIM21685 | |
Cars provided for private use | Where cash equivalent is more than nil | No | Yes | NIM16001 | EIM23010 |
Childcare help for children up to the age of 16, effective up to 5 April 2005 | Provided by employer, or employer contracts with the provider – excluding school fees | No | No | NIM16100 | |
Employer reimburses the employee or provides additional salary to meet the cost of childcare | Yes | No | NIM16100 | ||
Childcare benefits, (other than workplace nurseries – see below) for children up to the age of 16, effective from 6 April 2005 | Provided by employer, or employer contracts with the provider up to a limit of £55 per week – excluding school fees | No | No | NIM16110 | EIM21902 |
Employer reimburses the employee or provides additional salary to meet the cost of childcare | Yes | No | NIM16110 | EIM21902 | |
Clothing or uniforms which can be worn at any time | Employer provided | No | Yes | NIM02020; NIM05010 | EIM32450; EIM32475 |
Employee is reimbursed cost | Yes | No | NIM02020; NIM05010 | EIM00520; EIM32450; EIM32475 | |
Clothing (protective) or uniforms which are necessary for work – may have a logo | Any circumstances | No | No | NIM02020; NIM05010 | EIM32470 |
Computers loaned for private use | Loaned for private use (tax years up to and including 2005 to 2006) – first £500 of cash equivalent of benefit | No | No | EIM21700 | |
Loaned for private use (tax years up to and including 2005 to 2006) – cash equivalent of benefit above £500 | No | Yes | EIM21700 | ||
Loaned for private use on or after 6 April 2006 | No | Yes | EIM21699 | ||
Entertaining clients | No | No | NIM05670 | EIM32570 | |
Entertaining staff | Employer contracts | No | Yes | NIM05670 | EIM32570 |
Employee contracts | Yes | No | NIM05670 | EIM32570 | |
Eye tests and or special corrective appliances provided on or after 6 April 2006 | Conditions of section 320A ITEPA 2003 satisfied | No | No | NIM02145 | EIM21765 |
Eyes tests and or special corrective appliances provided before 6 April 2006 | Employer pays for the cost of or provides eyesight tests, spectacles required solely for VDU use, or where spectacles are for general use, but include a special prescription for VDU use, a proportion of the cost relating to the special prescription. | No | No | EIM21765 | |
Food, groceries, farm produce | Employer contracts | No | Yes | NIM02020 | EIM21640 |
Employee contracts | Yes | No | NIM02020 | EIM21640 | |
Goods, such as TV, furniture etc., transferred to employee | Employer contracts | No | Yes | NIM02020 | EIM21640 |
Employee contracts | Yes | No | NIM02020 | EIM21640 | |
Holidays | Employer contracts | No | Yes | NIM02020 | EIM21640 |
Employee contracts | Yes | No | NIM02020 | EIM21640 | |
Living accommodation provided by employer | Exempt from Income Tax | No | No | NIM02020 | EIM11300 |
Not exempt from Income Tax | No | Yes | NIM02020 | EIM11300 | |
Loans, beneficial arrangements | Qualifying loans | No | No | NIM02210; NIM16670 | EIM26100 |
Non-qualifying loans | No | Yes | NIM02210; NIM16670 | EIM26100 | |
Loans, written off | At time employer decides not to seek repayment of the loan | Yes | No | NIM02210; NIM16670 | EIM26100 |
Meals provided | At canteen open to all staff or on employer’s premises and offered on reasonable scale and all employees may obtain free or subsidised meals | No | No | NIM02020 | EIM21670 |
All other circumstances | No | Yes | NIM02020 | EIM21670 | |
Medical check ups or health screening provided by employer | One check up/health screening per year and screening/medical check up generally available to all employees or check up available to all employees identified in previous screening as needing a check up | No | No | NIM02020 | EIM21765 |
Medical, dental treatment or insurance to cover cost | Employer contracts | No | Yes | NIM02020; NIM02230 | EIM21762 |
Employee contracts | Yes | No | NIM02020; NIM02230 | EIM21762 | |
Outside UK where need for treatment arises while employee is working outside UK for the employer | No | No | NIM02020; NIM02230 | EIM21766 | |
Mobile phone provided by employer | Mobile phones provided to an employee or any family or household member, before 6 April 2006, for private use | No | No | NIM02020 | EIM21780 |
One mobile phone provided to an employee, on or after 6 April 2006, for private use – not provided to the employee’s family and household. | No | No | NIM02020 | EIM21778 | |
Mobile phones - cost of private calls | Employer contracts | No | Yes | EIM32945 | |
Employee contracts | Yes | No | EIM32945 | ||
Office accommodation, supplies/services used by employees in carrying out employment (includes computers) | Private use is not significant | No | No | NIM05010 | EIM21610 |
Personal bills of the employee | Yes | No | NIM02270 | EIM00580 | |
Personal incidental expenses | Conditions for exemption satisfied | No | No | NIM06010 | EIM02710 |
Readily Convertible Assets | Yes | No | NIM04007 | EIM11900 | |
Relocation expenses/benefits | Non-eligible expenses | Yes | No | NIM06110; NIM16250 | EIM03100 |
Non-qualifying benefits and eligible expenses paid after the relevant day | No | Yes | NIM06110; NIM16250 | EIM03100 | |
Qualifying expenses and benefits of £8,000 or less | No | No | NIM06110; NIM16250 | EIM03100 | |
Qualifying expenses/benefits in excess of £8,000 | No | Yes | NIM06110; NIM16250 | EIM03100 | |
Scholarships awarded to students because of their parent’s employment | Employer contracts | No | Yes | EIM30000 | |
Employee contracts | Yes | No | EIM30000 | ||
School fees | Employer contracts | No | Yes | NIM16105 | EIM21640 |
Employee contracts | Yes | No | NIM16105 | EIM21640 | |
Social functions | Annual parties for which conditions for tax exemption satisfied | No | No | NIM02020 | EIM21690 |
Any other type of function | No | Yes | NIM02020 | EIM21690 | |
Sporting or recreational facilities provided by employer | Conditions for tax exemption satisfied | No | No | NIM02020 | EIM21825 |
All other circumstances | No | Yes | NIM02020 | EIM21825 | |
Subscription and fees allowed under sections 343 or 344 of ITEPA 2003 (before 6 April 2003 – section 201 ICTA 1988) | Any circumstances | No | No | NIM16150 | EIM32880 |
Subscription and fees not allowed under sections 343 or 344 of ITEPA 2003 (before 6 April 2003 – section 201 ICTA 1988) | Employer contracts | No | Yes | NIM16150 | EIM32880 |
Employee contracts | Yes | No | NIM16150 | EIM32880 | |
Staff suggestion awards | Conditions of section 321 of ITEPA 2003 satisfied | No | No | NIM02350; NIM16300 | EIM06600 |
Conditions of section 321 of ITEPA 2003 not satisfied – award made up of cash and/or a benefit | Yes | Yes | NIM02350; NIM16300 | EIM06600 | |
Telephones - employer contracts with supplier | Cost of rental where private use is more than not significant | No | Yes | NIM06190 | EIM21615 |
Costs of calls, where private use is more than not significant | No | Yes | NIM06190 | EIM21615 | |
Cost of all private calls reimbursed by employee | No | No | NIM06190 | EIM21615 | |
Telephones - employee contracts with supplier | Cost of rental | Yes | No | NIM06190 | EIM21615 |
Cost of business calls | No | No | NIM06190 | EIM21615 | |
Cost of private calls | Yes | No | NIM06190 | EIM21615 | |
Trivial benefit provided to an employee (or to a member of their family or household) costing up to £50. | When the benefit provided is exempt from tax under section 323A ITEPA 2003 | No | No | NIM06190 | EIM21864 to EIM21871 |
Vans, provided and made available for private use (position up to 5 April 2005) | Private use is any use other than business travel | No | Yes | NIM06190 | EIM22050 |
Vans, provided and made available for private use (position from 6 April 2005) | Private use is insignificant | No | No | EIM22700; EIM22745 | |
Private use is more than insignificant | No | Yes | EIM22700; EIM22745 | ||
Van fuel for vans provided and made available for private use (position from 6 April 2000 to 5 April 2005) | Fuel provided by cash, credit/debit/fuel agency card (litany not used), non-cash voucher | Yes | No | NIM16386 | |
Van fuel for vans provided and made available for private use (position from 6 April 2005 to 5 April 2007) | Fuel provided by cash, credit/debit/fuel agency card (litany not used), non-cash voucher | Yes | No | NIM16387 | EIM22700 |
Van fuel for vans provided and made available for private use (position from 6 April 2000 to 5 April 2007) | Fuel provided from employer’s pump or by credit/debit/fuel agency card (litany used) | No | No | NIM16385 | EIM22900 |
Van fuel for vans provided and made available for private use (position from 6 April 2007) | Fuel provided by whatever means for more than ordinary commuting | No | Yes | NIM16387; NIM16388 | EIM22700 |
Workplace nurseries | Conditions for exemption satisfied | No | No | EIM21902 | |
Works transport services | Conditions of section 242 ITEPA 2003 satisfied | No | No | EIM21850 | |
Conditions of section 242 ITEPA 2003 not satisfied | No | Yes | EIM21850 |