Disguised Remuneration – National Insurance Contributions Regulations

16 January 2012 |

Amounts chargeable to income tax under Part 7A of ITEPA are now treated as earnings for the purposes of National Insurance Contributions (“NICs”).

Regulations came into force on 6 December 2011 which make provision for amounts chargeable to income tax under the Disguised Remuneration legislation to be treated as earnings for the purposes of NICs if they would not already be treated as such.  They also include provision to prevent a double liability for NICs on such amounts.

The Regulations do not have retrospective effect so where there is no prior liability to account for Class 1 NICs, employers do not need to do so on any “disguised remuneration” amounts which have given rise to tax liabilities before 6 December 2011 and which have, or will be, subject to PAYE.


There are no surprises in the regulations as they largely reflect the draft regulations that were issued earlier in the year.  The real problem, of course, is that the complexity and uncertainty around the disguised remuneration legislation now extends to National Insurance as well as Income Tax.

For further information or to discuss the issues raised, please contact Guy Abbiss or John Mooney on +44 20 3051 5711.


Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

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