NIM16251 - Class 1A National Insurance contributions: Special Class 1A NICs cases: Removal benefits and expenses: General

Before 6 April 2000, the only benefits that could attract Class 1A NICs liability were cars and fuel benefits. Therefore, no Class 1A NICs were due on any removal benefit or expense.

Removal benefits were disregarded under the payment in kind disregard, see NIM02020 so Class 1 NIC liability would not arise. NIM06115 onwards provides detailed guidance on the treatment for Class 1 NICs purposes of removal expenses and allowances. It also explains that from 6 April 2000 Class 1A NICs may be due on:

• non-qualifying removal benefits,
• certain non-qualifying removal expenses, and
• on any amount of a relocation package which exceeds £8,000.

To understand the interaction of Class 1 and Class 1A NICs liability on relocation packages familiarise yourself with the Class 1 NICs position before giving consideration to whether, and to what extent, a Class 1A NICs liability also arises. The differences which exist between the tax and Class 1 NICs treatment of removal expenses has a direct bearing on the amount of Class 1A NICs employers are liable to pay on the relocation packages they provide.

For guidance on removal benefits and expenses and Class 1A NICs from 6 April 2000, see NIM16260 onwards.