National Insurance Manual

NIM15205 - Class 1A National Insurance contributions: Calculating Class 1A NICs: Amounts made good by the employee: Guidance on what making good means

Guidance on what making good means and how a making good payment is treated for tax purposes is provided at EIM21120

Where benefits are partly taxable under section 62 of ITEPA 2003 and partly under the benefits code, contact IPD Technical, with a full report.  See guidance here which explains how.

IPD Technical  will confirm the amount of earnings chargeable to income tax.

The example below illustrates when a benefit would be taxable partly under section 62 of ITEPA 2003 and partly under the benefits code.

Example 1

Employer pays £2,000 for a TV.

Employer gives the TV to director on 1/6/06.

The amount of general earnings chargeable to income tax under section 62 of ITEPA 2003 is £1,200 (second-hand value of TV).

The amount of general earnings chargeable to income tax under section 204 of ITEPA 2003 is £2,000 less £1,200 = £800.