The Social Security (Contributions) Regulations (SSCR) clarify the rules over which payments should not be treated as general earnings for Class 1A National Insurance Contributions (NICs) for employees who ‘perform duties abroad’.

The measure released by HMRC clarifies the position for a small number of employers whose employees perform duties abroad and incur travel costs and expenses.

The amendment updates regulation 40 of SSCR to ensure it works as intended by updating a cross-reference.

The following payments are disregarded as general earnings for the purpose of Class 1A NICs:

• travel between employments where duties performed abroad;
• travel costs and expenses where duties performed abroad: earner’s travel;
• travel costs and expenses where duties performed abroad: visiting spouse’s [civil partner’s] or child’s travel; and
• foreign accommodation and subsistence costs and expenses (overseas employments).

Regulation 40 of the SSCR provides for agreed general earnings to be excluded from any charge to Class 1A NICs.

This includes certain classes of general earnings that are disregarded in the calculation of earnings for Class 1 NICs purposes by Schedule 3 to the SSCR.

The policy paper, National Insurance contributions: clarity for employers whose workers perform duties abroad (Class 1A), is available here.