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Regulations have been published to make provision for amounts chargeable to income tax under the disguised remuneration legislation in ITEPA 2003, part 7A chapter 2 to be treated as earnings for the purposes of National Insurance if they would not already be earnings for such purposes.
They include provision to prevent a double liability for National Insurance on such amounts.
The regulations will come into force on 6 December 2011. Employers will have to account for class 1 primary and secondary contributions on amounts which count as employment income on or after that date, except where the part 7A charge arises on 6 April 2012 in relation to an ‘early step’ which took place between 9 December 2010 and 5 April 2011.
Guidance on the part 7A treatment of early steps can be found in HMRC’s Employment Income Manual starting at EIM45905.
The regulations do not have retrospective effect.
