From 6 April 2000 a new scheme is introduced to pay the national insurance on awards given to employees.
This new scheme applies only if:
- the award is not in cash, such as goods or vouchers;
- the award is provided by a third party; and
- the third party gives the award because of the employment.
When all these conditions are met, the national insurance is class 1A rather than class 1. If any of the conditions is not met, the award is subject to class 1 national insurance which the employer is obliged to operate.
The new system is designed to mirror the Taxed Award Scheme which already applies for income tax purposes.
Social Security Contributions (Intermediaries) Regulations SI 2000 No 727
[2000]