Sarah Bradford explores the nature of Class 1A National Insurance contributions and the extension of the charge from April 2020 to taxable termination payments and taxable sporting testimonials.
Class 1A National Insurance contributions (NICs) are employer-only NICs. The charge originally applied only to cars and car fuel, before being extended to most taxable benefits-in-kind from April 2000. The reform of the expenses and benefits regime from 6 April 2016 extended the net further; the reforms had the effect of bringing taxable benefits provided to employees previously classed as ‘lower paid’ within the Class 1A NICs net.
From 6 April 2020, the Class 1A NICs net is cast wider still. From that date, the National Insurance Contributions (Termination Payments and Sporting Testimonials) Act 2019 will bring taxable termination payments and sporting testimonials within
