NIM13150 - Class 1A NICs: Liability for Class 1A NICs: Table of common benefits liable for Class 1A NICs

The table below lists what are likely to be the most commonly provided benefits. The purpose of the table is to indicate whether Class 1 or Class 1A NICs are due in particular cases. The amount of Class 1A NICs due is based upon the amount of the emolument, or deemed emolument, calculated under the law for income tax under schedule E and guidance on this can be found in the Schedule E manual. The table also provides references to additional NIM guidance where special Class 1A NICs rules apply.

The table is not exhaustive but provides what are likely to be the most commonly provided benefits. Remember that individual circumstances or facts surrounding a particular benefit may influence the class of NICs due. In most cases the arrangements put in place by an employer to supply the employee with a benefit will determine whether Class 1 or Class 1A NICs are due. In some instances the ‘circumstances’ box of the table will indicate whether the contract to supply the goods or services is with the employer or the employee. See NIM13170 for the importance of this distinction for NICs.

Type of benefit	Circumstances of provision	Class 1 Liability	Class 1A liability	Further guidance
Assets placed at the employee’s disposal by the employer	Provided for business use and private use is not significant – except motor vehicles, boats and aircraft	No	No	SE21615 SE21602
Assets placed at the employee’s disposal by the employer	Provided for mixed business and private use	No	Yes	SE21605
Assets transferred to the employee but not Readily Convertible Assets	Can be turned into cash only by sale, such as furniture, kitchen appliances, property and clothes	No	Yes	SE21640
Car fuel for private motoring in a provided car	Any means of supply or purchase, except mileage allowances or round sum allowances	No	Yes	SE23750 NIM16175
Car fuel for private motoring in a privately owned car	Supplied using cash, a company credit card, garage or agency card and the litany is used	No	Yes	NIM06051 NIM16170
	Supplied by any of the above means and the litany not used	Yes	No
	Supplied from employer’s own pump	No	Yes
Car parking facilities	At or near place of work	No	No	SE21685
Car parking facilities	Elsewhere – unless the parking is part of a journey which is qualifying business travel	No	Yes	SE21685
Cars provided for private use		No	Yes	SE23001
Childcare help for children up to the age of 16, effective up to 5 April 2004	Provided by employer, or employer contracts with the provider – excluding school fees	No	No	NIM16100 EIM21902
	Employer reimburses the employee or provides additional salary to meet the cost of childcare	Yes	No	NIM16100 EIM21902
Childcare benefits, (other than workplace nurseries – see below) for children up to the age of 16, effective from 6 April 2004	Provided by employer, or employer contracts with the provider up to a limit of £50 per week – excluding school fees	No	No	NIM16110 EIM21902
	Employer reimburses the employee or provides additional salary to meet the cost of childcare	Yes	No
Clothing or uniforms which can be worn at any time	Employer provided	No	Yes	SE32450 SE32475
Clothing or uniforms which can be worn at any time	Employee is reimbursed the cost	Yes	No
Clothing (protective) or uniforms which are necessary for work – may have a logo	Any circumstances	No	No
Computers loaned for private use	Annual value and running expenses of £500 or less	No	No	SE21697
Computers loaned for private use	Amount in excess of £500	No	Yes	SE21697
Entertaining clients		No	No	SE32570 NIM05670
Entertaining staff	Employer contracts	No	Yes
Entertaining staff	Employee contracts	Yes	No
Food, groceries, farm produce	Employer contracts	No	Yes	SE21640
Food, groceries, farm produce	Employee contracts	Yes	No	SE21640
Goods, such as TV, furniture etc, transferred to employee	Employer contracts	No	Yes	SE21640
Goods, such as TV, furniture etc, transferred to employee	Employee contracts	Yes	No	SE21640
Holidays	Employer contracts	No	Yes	SE21640
Holidays	Employee contracts	Yes	No	SE21640
Living Accommodation provided by employer	Exempt from Schedule E charge	No	No	SE11300
Living Accommodation provided by employer	Not exempt from Schedule E charge	No	Yes	SE11300
Loans, beneficial arrangements	Qualifying loans	No	No	SE26100 NIM2150
Loans, beneficial arrangements	Non-qualifying loans	No	Yes
Loans, written off	At time employer decides not to seek repayment of the loan	Yes	No
Meals provided	At canteen open to all staff or on employer’s premises and offered on reasonable scale and all employees may obtain free or subsidised meals	No	No	SE21671
Meals provided	All other circumstances	No	Yes	SE21671
Medical, dental treatment or insurance to cover cost	Employer contracts	No	Yes	SE21762
	Employee contracts	Yes	No	SE21762
	Employee contracts	Yes	No	SE21766
	Outside UK where need for treatment arises while employee is working outside UK for the employer	No	No	SE21766
Mobile phones provided by employer		No	No	SE32945
Mobile phones, cost of private calls	Employer contracts	No	No
Mobile phones, cost of private calls	Employee contracts	Yes	No
Office accommodation, supplies/services used by employees in carrying out employment	Private use is not significant	No	No	SE21601
Personal bills of the employee (pecuniary liability)		Yes	No	SE00580 NIM02270
Personal Incidental expenses	Conditions for exemption satisfied	No	No	SE02700 NIM06010
Readily Convertible Assets		Yes	No	SE11803 NIM04007
Relocation expenses/benefits	Non-eligible expenses	Yes	No	SE03100 NIM06110 NIM16250
	Non-qualifying benefits and eligible expenses paid after the relevant day	No	Yes
	Qualifying expenses and benefits of £8,000 or less	No	No
	Qualifying expenses/benefits in excess of £8000	No	Yes
Scholarships awarded to students because of their parent’s employment	Employer contracts	No	Yes	SE30000
	Employee contracts	Yes	No	SE30000
School fees	Employer contracts	No	Yes	SE21640 NIM16103
School fees	Employee contracts	Yes	No	SE21640 NIM16103
Social Functions	Annual parties for which conditions for tax exemption satisfied	No	No	SE21690
Social Functions	Any other type of function	No	Yes	SE21690
Sporting or recreational facilities provided by employer	Conditions for tax exemption satisfied	No	No	SE22850
Sporting or recreational facilities provided by employer	All other circumstances	No	Yes	SE22850
Subscription and fees allowed under S201 ICTA 1988	Any circumstances	No	No	SE32880
Subscription and fees not allowed under S201 ICTA 1988	Employer contracts	No	Yes
Subscription and fees not allowed under S201 ICTA 1988	Employee contracts	Yes	No
Staff suggestion awards	Conditions of ESC A57 satisfied	No	No	SE06600 NIM02350 NIM16300
Staff suggestion awards	Conditions of ESC A57 not satisfied – award made up of a cash and/or a benefit	Yes	Yes	SE06600 NIM02350 NIM16300
Telephones, employer contracts with supplier	Cost of rental, unless private use is not significant	No	Yes	SE32955 NIM06190
	Costs of calls, unless private use is not significant	No	Yes
	Cost of all private calls is reimbursed by employee	No	No
Telephones, employee contracts with supplier	Cost of rental	Yes	No
	Cost of business calls	No	No
	Cost of private calls	Yes	No
Vans, available for private use		No	Yes	SE22050
Van fuel	Purchased by the employee for private use and later reimbursed	Yes	No	SE22130 NIM16185
	Provided for the employee for private use	No	No
	Provided for business use only – no element of profit	No	No
Workplace Nurseries	Conditions for exemption satisfied	No	No	EIM21902

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