NIM13306 - Class 1A NICs: liability for Class 1A NICs: Class 1A NICs on sporting testimonials: reporting the Class 1 NICs liabilities arising on a sporting testimonial payment

When the sporting testimonial falls within the new rules (see sections 226E ITEPA 2003 and 10ZBA SSCBA 1992) sporting testimonial payments that are in excess of the £100,000 threshold and the income tax and Class 1A liabilities arising on those payments, must be reported to HMRC on or before payments are made in accordance with the provisions that are applicable to real time reporting.

The Sporting Testimonial Committee will therefore need to register a PAYE scheme with HMRC to enable them to:

• comply with this real time reporting requirement
• pay over to HMRC the income tax and Class 1A liabilities arising

However, the committee does not need to register a PAYE scheme and comply with these reporting requirements if the sporting testimonial payment is less than £100,000 and therefore incurs no income tax nor Class 1A NICs liabilities.

For the purposes of reporting and paying any income tax and Class 1A liabilities, the independent testimonial committee will be treated as a secondary contributor.

Sporting Testimonial Committees must not report Class 1A NICs arising on sporting testimonial payments under the provisions of section 10ZBA SSCBA 1992 by using the annual P11D(b) payment and reporting process, which remains only applicable to the reporting of Class 1A NICs arising on taxable benefits-in-kind.

See NIM01600 for guidance about the rate of Class 1A NICs when the tax year is 2022 to 2023.