NIM02300 - Class 1 NICs : Earnings of employees and office holders : Horse racing - prize money

In September 1992, a decision made by the Secretary of State for Social Security [responsible for decisions on matters relating to NICs prior to 6 April 1999] confirmed that prize money from the Jockey Club was paid on a voluntary basis. This means that such payments are gratuities and may be excluded from gross pay, by virtue of regulation 25 and paragraph 5 of Part X of Schedule 3 to the Social Security (Contributions) Regulations 2001, when calculating Class 1 NICs.

This is only appropriate where the payment is not:

• made directly or indirectly by the secondary contributor and the sum does not comprise or represent sums previously paid to the secondary contributor; or
• directly or indirectly allocated by the secondary contributor to the earner.