Citation, commencement and interpretation

1.-(1) These Regulations may be cited as the Social Security (Contributions) Amendment (No. 7) Regulations 1993 and shall come into force, on 1st December 1993.

(2) In these Regulations "the principal Regulations" means the Social Security (Contributions) Regulations 1979(3).

Amendment of regulation 18 of the principal Regulations

2. In regulation 18 of the principal Regulations (calculation of earnings)(d) for paragraph (6) there shall be substituted the following paragraphs-

"(6) The amount of earnings which is comprised in any payment by way of the conferment of a beneficial interest in-

(a)any units in any unit trust scheme within the meaning of section 75(8) of the Financial Services Act 1986(4); or

(b)any asset falling within paragraph 9A of Schedule 1A to these Regulations,

having a published selling price and which falls to be taken into account in the computation of a person's earnings shall, for the purposes of earnings-related contributions, be calculated or estimated by reference to the published selling price on the date of that payment.

(7) In paragraph (6) of this regulation "published selling price" means the lowest selling price published on the date on which the payment in question is made and where no price is published on that date it means the lowest selling price published on the last previous date on which such a price was published.".

Amendment of Schedule 1A to the principal Regulations

3. In Schedule 1A to the principal Regulations (assets not to be disregarded as payments under regulation 19(1)(d))(5)-

(a)in paragraph 5(6) for the words "paragraph 1, 2, 3 or 4" there shall be substituted the words "paragraphs 1 to 4 or 9A";

(b)after paragraph 9 there shall be inserted the following paragraphs-

"9A. Any commodity or other property of any description not falling within paragraphs 1 to 4 or 6 to 9 of this Schedule and which is capable of being sold on a recognised investment exchange.

9B. Any voucher which is capable of being exchanged for an asset falling within any of the foregoing paragraphs of this Schedule.";

(c)after paragraph 14 there shall be added the following paragraphs-

"15. For the purposes of paragraph 9A of this Schedule "a recognised investment exchange" is-

(a)a body recognised as such under the Financial Services Act 1986(7); or

(b)the London Bullion Market.

16. In paragraph 9B of this Schedule "voucher" means any voucher, stamp or similar document, whether used singly or together with other such vouchers, stamps or documents.".

Explanatory Note

(This note is not part of the Regulations)

These Regulations further amend the Social Security (Contributions) Regulations 1979 ("the principal Regulations").

Regulation 2 amends regulation 18 of the principal Regulations (calculation of earnings) so that where a payment of earnings is made in the form of a beneficial interest in any asset capable of being traded on a recognised investment exchange and having a published selling price, the value of that payment is to be determined by reference to that price.

Regulation 3 inserts paragraphs 9A, 9B, 15 and 16 into Schedule 1A to the principal Regulations. (Schedule 1A lists certain assets which are not capable of being payments in kind for the purposes of calculating earnings.) Paragraph 9A refers to assets other than those already listed in that Schedule and which are capable of being traded on a recognised investment exchange, paragraph 9B refers to vouchers, and paragraphs 15 and 16 define certain terms.

These Regulations do not impose any additional administrative costs on business but the effect will be to require the payment of secondary (employers') Class 1 national insurance contributions which had not previously been due on certain payments of earnings, where those payments of earnings are made by means of assets now covered by these Regulations.

An assessment of the cost to business of applying these Regulations has been placed in the Libraries of both Houses of Parliament. Copies can be obtained by post from the Department of Social Security, Room 09/03, Adelphi, 1 11 John Adam Street, London WC2N 6HT.