SI 2020/320 – The Social Security (Contributions) (Amendment No. 3) Regulations 2020

Released 20 March 2020

SI 2020/320 amends SI 2001/1004 to provide Class 1 disregard for voluntary office holders expenses payments that are exempt from income tax from 6 April 2020.

The Social Security (Contributions) (Amendment No. 3) Regulations 2020 amend the Social Security (Contributions) Regulations 2001 (SI 2001/1004) which provide for certain payments to be disregarded in the calculation of earnings for the purpose of establishing liability to Class 1 contributions. The regulations insert a new Schedule 3, Pt. 8, para. 8B so that any payment of expenses made to voluntary office holders and in respect of which no liability to income tax arises by virtue of the Income Tax (Earnings and Pensions) Act 2003, s. 299B is also disregarded for this purpose. The amendment is to take into account new provisions in ITEPA 2003 inserted by resolution no. 14, passed by the House of Commons on 17 March 2020 following the budget held on 11 March. The resolution has temporary statutory effect by virtue of the Provisional Collection of Taxes Act 1968, s. 1. It inserts new ITEPA 2003, s. 299B, which provides that no liability to income tax arises in respect of a payment to a person who holds a voluntary office if the payment is in respect of reasonable expenses incurred in carrying out the duties of that office. The provisions of the resolution correspond to provisions contained in Finance Bill 2020, cl. 14 of as introduced to Parliament on 19 March 2020. Assuming that the clause is not rejected during the passage of the Bill through Parliament, those provisions will come into force when the Bill receives Royal Assent. If the clause is rejected during passage of the Bill, with the effect that the new s. 299B is not inserted into ITEPA 2003, this statutory instrument would be revoked. The regulations come into force on 6 April 2020.

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