NIM13090 – Class 1A National Insurance contributions: Liability for Class 1A NICs: Conditions to be satisfied for liability to arise: Class 1 or Class 1B NICs liability

Section 10(1)(c) and Section 10(6) SSCBA 1992

For Class 1A NICs liability to arise the benefit provided must not attract either a Class 1 or Class 1B NICs liability.

Class 1 NICs due

Some benefits, such as non-cash vouchers, are liable for Class 1 NICs, see NIM02411. Where a liability for Class 1 NICs exists, Class 1A NICs are not due. For a list of items which attract a Class 1 NICs liability see NIM2010 onwards.

Class 1B NICs due

Some benefits, which are minor or irregular, or difficult to apportion between employees, can be included in a PAYE Settlement Agreement (PSA). For further guidance on PSAs see the PAYE Settlement Agreement Manual.

Those benefits included in a PSA, which would otherwise attract Class 1A NICs liability, attract a Class 1B NICs liability instead. Where Class 1B NICs liability exists, Class 1A NICs are not due. For guidance on Class 1B NICs, including examples of the types of benefits which are likely to be included in a PSA, see NIM18000 onwards.

Dual NICs liability

There are no occasions where a liability for Class 1 and Class 1A NICs should exist on the same benefit. Unless specifically excluded from Class 1A NICs liability, where

• an earner is chargeable to income tax under ITEPA 2003 on an amount of general earnings (before 6 April 2003 - an emolument on which the earner is chargeable to income tax under Schedule E), and
• those general earnings do not attract either Class 1 or Class 1B NICs liability

those general earnings are liable for Class 1A NICs. Details of those general earnings specifically excluded from Class 1A NICs are given at NIM14000 onwards.