NIM13130 – Class 1A NICs: Liability for Class 1A NICs: Benefits provided to family and household members
Benefits provided to members of the family or household of
directors and employees who are in employments covered by Part V
Chapter II ICTA 1988 are chargeable to Schedule E income tax on the
director or employee, if the benefits are provided by reason of the
employment.
Class 1A NICs are payable on these benefits provided they are
taxable under Schedule E as emoluments. The family member does not
need to be an employee or receive earnings from the employer to
allow a Class 1A NICs liability to arise.
Guidance on family and household members is contained at
SE20504 and SE20505 of the Schedule E Manual. That guidance applies
equally to Class 1A NICs, including those instances where the
benefit is not chargeable to income tax because the employer is an
individual (for example the employee’s father) and it can be
shown that the benefit was provided in the normal course of his or
her domestic family or personal relationships.
Special rules apply to Class 1A NICs on cars provided to
members of a director’s or employee’s family or
household, see
NIM16030
