Since 30 November 1993, if an employer pays all or part of the
Council Tax or water or sewerage charges for an employee who lives
in provided accommodation, for example a farm worker, the payment
is excluded from the calculation of earnings for NICs purposes.
This was initially provided for by regulation 19(1)(r) of the
Social Security (Contributions) Regulations 1979 but is now covered
by regulation 25 and paragraph 10 of Part VIII of Schedule 3 to the
Social Security (Contributions) Regulations 2001.
The provision was introduced to mirror the tax treatment of
such payments under section 314 of ITEPA 2003 (previously section
145(4) ICTA 1988) which excludes from tax payments of council tax,
water and sewerage charges if they are paid in respect of
accommodation which falls within the exceptions covered by sections
99 and 100 of the Income Tax (Earnings and Pensions) Act 2003 - see
EIM 00585 and EIM11332 (SE11332 for guidance regarding section
145(4) ICTA 1988).
