The NIC status of payments by an employer to a third party, such as a pension fund or insurance company, for an employee’s benefit has been litigated for over a decade, producing widely divergent judicial opinions. With the Supreme Court judgment in HMRC v Forde and McHugh Ltd [2014] UKSC 14, we now at last have clarity. Such payments are not earnings for NIC purposes, provided the employee has no right to the payment but only to the benefit procured by the payment. Earnings are what the employee obtains, which is not necessarily what the employer pays.
