The National Insurance Contributions and Statutory Payments Act 2004 (NICSPA) received Royal Assent in May 2004 and, among the various NICs changes defined, there was an extension to an employer's ability to retain or sell securities, usually shares, equal to an employee's NICs liability when a payment of share-based earnings is made to an employee. The right to do so applies in the case of current and former employees and the recovery may be made whether or not the employer is otherwise able to recover the NICs from the employee's future earnings. Recovery may also be made where share-based earnings are paid in the tax year after the employee leaves.

Details of these new arrangements were given in the Newsletter of 25 June 2004 .

New Regulations made under NICSPA, The Social Security (Contributions) (Amendment No. 5) Regulations 2004, require employers to obtain their employees' consent in writing to the recovery, in advance of the event. The Regulations come into force from 22 September 2004.

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...back to 3 September 2004

Sources:
www.inlandrevenue.gov.uk/si/2004-2246.pdf
www.inlandrevenue.gov.uk/si/2004-2246-em.pdf