For Class 1A NICs liability to arise the item provided must be general earnings or be treated as general earnings chargeable to income tax under ITEPA 2003 (before 6 April 2003 - emoluments chargeable to income tax under Schedule E). No Class 1A NICs liability can arise on something which is not general earnings or treated as such (before 6 April 2003 - emoluments or treated as such chargeable to income tax under Schedule E). There are no exceptions to this rule.
A director is forced to resign from a company’s board of directors and receives £50,000 to compensate him for his loss of office. The money paid is not from the employment so the payment is not general earnings as defined in section 62 of ITEPA 2003, see EIM02100. Neither are there any provisions within the benefits code that treat the payment as general earnings. Although the amount in excess of £30,000, i.e. £20,000, is treated as employment income under section 403 of ITEPA 2003 and is chargeable to income tax, the amount is not treated as general earnings so no Class 1A NICs are due.