EIM01653 - Employment income: New Deal: option 1: subsidised work with an employer
For New Deal participants working in a subsidised job with an
employer the Employment Service pay a subsidy to the employer. The
employer must pay the participant a wage at least equivalent to the
subsidy.
The employer must deduct income tax under PAYE and National
Insurance contributions (NICs) from these wages. In 1997/98 and
1998/99 special treatment applied for income tax (see SE01656).
The amount of the subsidy paid to the employer depends on the
age of the participant and the hours worked. For instance, in
1998/99 for a participant aged 18 to 24 working 30 hours or more
the employer received £60 per week. The payment for a
participant aged 25 or over, working the same number of hours, was
£75.
Self employment
New Deal payments made to self employed participants (except those made under the New Deal 50 plus scheme (see EIM01660)) are part of any trading profits that they make and are chargeable to income tax and Class 4 NICs. However there is no liability to Class 2 NICs for their period of participation in the New Deal.
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