NIM16353 - Class 1A National Insurance contributions: Special Class 1A NICs cases: Third party benefits: Arranging or facilitating the provision of a benefit

Section 10ZA of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)

Section 10ZA of the SSCBA 1992 sets out what conditions must be satisfied for a third party, rather than the employer, to be liable to pay Class 1A NICs. The conditions are the same as those in NIM13021. In addition, the third party must have provided the award and the employer must not have arranged or facilitated the provision of the award. There is no statutory definition of what is meant by ‘arranged’ or ‘facilitated’. From the facts, it will usually be clear whether the employer is involved in the arrangements for providing his employees with benefits via a third party. For example:

• an employer asks a third party to arrange an incentive scheme by undertaking the necessary administrative work, or by financing the awards organised by a third party
• a third party approaches an employer to run promotional exercises for their own products and the employer agrees to undertake the administrative work involved.

Where all that an employer does is to provide the third party with a list of the employees to whom awards can be made, do not regard this as arranging or facilitating the provision of the award.

In any dispute about whether an employer has arranged or facilitated an award obtain the relevant facts and the views of both the employer and the third party.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)