882.New section 10ZA(1) lists the elements necessary for this measure to take effect. The employee or a member of his family must receive a taxable emolument that attracts a Class 1A charge under the new section 10; the BIK is provided by someone other than the employer; and the employer has not arranged or facilitated the provision.
883.New section 10ZA(2) provides that where the third party also pays a sum to meet the employee’s tax liability on the BIK, that payment also is subject to Class 1A NICs, rather than Class 1 as it would be if the employer had paid it.
884.New section 10ZA(3) moves the liability for the Class 1A NICs on the relevant benefit and any associated tax from the employer and onto the third party, except in the circumstances in subsection (4).
885.New section 10ZA(4) provides that for the tax year commencing 6 April 2000 the third party needs to elect to pay the Class 1A NICs and notify the Revenue in writing.
886.New section 10ZA(5) gives the Treasury power to prescribe in regulations the meaning of “arranged or facilitated”.
887.New section 10ZA(6) defines members of an employee’s family as carrying the same meaning as in s.168(4) ICTA.
Part IV: National Insurance Contributions Commentary on Sections New section 10ZA: Liability of third party provider of benefits in kind