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Nine amendments tabled for NIC Bill

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The proposed government amendments to the NICs (No 2) Bill have been published. The government has tabled nine amendments for the Public Bill Committee on 21 October 2014. These take account of 2015/16 class 2 rates and thresholds and insert a new paragraph in Schedule 2 to ensure that the higher standard of reasonable care in income tax legislation applying to tax returns of clients of high-risk promoters also applies to NICs avoidance schemes. Read the written ministerial statement.

In addition, The Social Security Class 3A Contributions (Amendment) Regulations 2014, SI 2014/2746, have been laid before Parliament. The Pensions Act 2014 introduced class 3A NICs, a new voluntary contribution enabling those who reach state pension age before 6 April 2016 to top up their additional state pension record. Class 3A NIC will become payable from October 2015 and these regulations set a cut-off date (the earliest being 5 April 2017) beyond which no further class 3A NICs can be paid. They also specify the circumstances in which contributions can be repaid. The regulations come into force on 12 October 2015 in Great Britain (and from a date to be appointed in Northern Ireland). A further set of draft regulations and a draft order contain detailed rules about contribution amounts and units of additional pension obtained.

The Pensions Act 2014 (Consequential Amendments) (Units of Additional Pension) Order, SI 2014/Draft, has been published. This draft amending order makes changes to existing legislation to prevent any reduction in state pension or disablement pension for individuals who obtain additional pension through payment of voluntary class 3A NICs from October 2015. People who reach state pension age before 6 April 2016 will be able to pay class 3A NIC between October 2015 and April 2017 to top up their additional state pension.

The Social Security Contributions (Limited Liability Partnership) Regulations, SI 2014/Draft, have been published. These draft regulations, which update the version published for comment in April 2014, give effect to provisions in the National Insurance Contributions Act 2014 treating salaried members of limited liability partnerships as employees subject to class 1 and class 1A NIC with retrospective effect from 6 April 2014, where three specified conditions are met. The regulations take priority over the intermediaries (IR35) legislation so that a double charge will not arise. They also ensure that salaried members are eligible to receive statutory payments. Changes from the earlier version include coverage for Northern Ireland. Corresponding income tax legislation is contained in FA 2014.

The Social Security (Contributions) (Amendment No 5) Regulations, SI 2014/Draft, have been updated. These draft regulations, which update the version published for comment in December 2013 and have retrospective effect from 6 April 2014, provide that no class 4 NIC will be charged on the allocation of profits to alternative investment fund manager (AIFM) partnerships who have elected to use the special tax treatment introduced in FA 2014 to adjust for profits deferred under EU rules. Class 4 NIC will instead be charged when those profits subsequently vest in individual partners.