Chapter 23 - Class 1A & Class 1B NIC

Question 1

Who pays Class 1A NIC?

Answer 1

Employers only

Question 2

What is Class 1A NIC paid on?

Answer 2

The cash equivalent of certain taxable benefits & on taxable termination payments in excess of £30k

Question 3

At what rate are Class 1A NICs paid at?

Answer 3

Employer rate - 13.8%

Question 4

Where an employer enters into a contract with a third party for the provision of a benefit (such as PMI), how is this treated?

Answer 4

This is a benefit subject to Class 1A NIC

Question 5

What are Class 1B NICs?

Answer 5

These are payable by the employer where they have entered into a PAYE Settlement Agreement

Question 6

What is Class 1B NIC charged on?

Answer 6

The grossed-up value of the benefits included within the PSA

Question 7

What are Class 1B NICs charged at?

Answer 7

The employers rate - 13.8%

Question 8

In what order do we calculate NIC?

Answer 8

First - Class 1 primary payable by the employee

Second - Class 1 secondary paid by the employer on earnings

Third - Class 1A payable by the employer on benefits