PT27 Class 1A

Question 1

Class 1A is taxable on?

Answer 1

The employer

Question 2

What is class 1A paid on?

Answer 2

on the cash equivalent of certain taxable benefits and from 6 April 2020 on taxable termination payments in excess of the £30,000 exemption. The rate is 15.05%.

Question 3

What if the benefits are put through the payroll?

Answer 3

It does not matter whether the benefits are included in the payroll or reported on form P11D – Class 1A National Insurance still applies.

Question 4

When is the due date for Class 1A NICs in respect of benefits?

Answer 4

22 July following the tax year where payment is made electronically (otherwise 19 July).

Question 5

Can you have both er Ni & class 1A?

Answer 5

No, Class 1A is not paid on benefits which have already been charged to Class 1 secondary NICs. Also, Class 1B takes priority
over Class 1A.

Question 6

When must class 1A NICS in respect of cash termination payments be reported?

Answer 6

Class 1A NICs in respect of cash termination payments must be reported on a Full Payment Submission when or before the termination payment is made and payment must be made via the PAYE system.

Question 7

What’s form P11D(b)?

Answer 7

The amount of Class 1A NICs payable in respect of benefits is notified to HMRC on form P11D(b) and submitted by 6 July following the tax year.

Question 8

What if form P11D(b) is submitted late?

Answer 8

Where form P11D(b) is submitted late, a penalty of £100 per month (or part month) per group of 50 employees applies.

Question 9

What’s the penalty for an incorrect P11D(b)?

Answer 9

Penalty for incorrect P11D(b) is up to 100% of the NICs lost. Amount of penalty depends on the behaviour giving rise to the inaccuracy and the level of disclosure.

Question 10

What’s class 1B NIC?

Answer 10

Class 1B National Insurance is payable on benefits included in and tax settled under a PAYE Settlement Agreement (PSA). The rate is 15.05%.

Question 11

When’s the due date for class 1B NICs?

Answer 11

The due date for Class 1B NICs is 22 October following the tax year where payment is made electronically (otherwise 19 October).

Question 12

Interest is charged on the late payment of Class 1A and Class 1B NICs from the due date.

Penalties apply where the payment of Class 1A or 1B NICs are not made by the due date are….

Answer 12

More than 30 days late: 5%
More than 5 months after the first penalty: Additional 5%
More than 11 months after the first penalty: Additional 5%