National Insurance Contributions (Employer Pensions Contributions) Bill

1 Employer pensions contributions pursuant to optional remuneration arrangements: Great Britain

(1)

In section 4 of the Social Security Contributions and Benefits Act 1992 (payments treated as remuneration and earnings), after subsection (6) insert—

“(6A)

In any case where—

(a)

a benefit of a kind mentioned in section 308 or 308A of ITEPA
2003 (contributions to pensions schemes) is provided to or for the benefit of an employed earner pursuant to optional remuneration arrangements, and

(b)

the employed earner would be chargeable to income tax at the
higher or additional rate in respect of the benefit if section 228A(5) of that Act had effect with the omission of paragraphs (f) and (g) (which refer to sections 308 and 308A),

regulations may make provision for the purposes of this Part for treating the amount foregone in relation to the benefit as remuneration derived from the earner’s employment.

(6B)

Regulations made under subsection (6A) must make provision for
amounts not exceeding the contributions limit for a tax year not to be so treated.

(6C)

The contributions limit is the amount specified by regulations made
under subsection (6A) as the contributions limit for the whole of a tax year; but—

(a)

the regulations may make other provision about that limit,
including provision prescribing an equivalent of that limit for earners paid weekly or at other intervals; and

(b)

if an equivalent is prescribed, the regulations may prescribe
an amount which exceeds by not more than £1 the amount which is the arithmetical equivalent of that limit.

(6D)

Regulations made under subsection (6A) —

(a)

may make provision for any amount treated as remuneration
to be treated as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of the earner’s employment;

(b)

may provide, in prescribed cases, for the amount treated as
remuneration to be an amount other than the amount foregone in relation to the benefit; and

(c)

may provide for that other amount to be calculated in such
manner and on such basis as may be prescribed.

(6E)

In cases where the contribution limit is exceeded, regulations must
make provisions for such amounts not be treated as earnings by virtue of the Education (Student Loans) (Repayment) Regulations 2009 (S.I. 2009/470), Part 4, Regulation 41.

(6F)

Expressions which are used in subsection (6A) and the benefits code
have the same meaning in that subsection as they have in that code.”

(2)

In section 176 of that Act (Parliamentary control)—

(a)

in subsection (1) , before paragraph (za) insert—

“(zza)

regulations under section 4 (6A) ;”;

(b)

after subsection (1) , insert—

“(1A)

Subsection (1) does not apply to regulations under section
4 (6A) which make provision only for increasing the amount of the contributions limit for a tax year.”

(3)

The amendments made by this section have effect for the tax year 2029-30
and subsequent tax years.

(4)

The first regulations made under subsection (6A) of section 4 of the Social
Security Contributions and Benefits Act 1992, as inserted by subsection (1) , must specify the contributions limit as £5,000 for a tax year (but subject to any provision made in reliance on subsection (6C) (a) or (b) of that section).

(5)

The amendments made by this section do not apply where the employer—

(a)

is a small or medium-sized enterprise, or

(b)

is a charity or social enterprise which meets the conditions in
subsection (6) .

(6)

The conditions are that—

(a)

the employer meets the definition of a small or medium-sized
enterprise in section 465 of the Companies Act 2006 (companies qualifying as medium-sized: general), and

(b)

the employment is carried out wholly or mainly for the purposes of
that charity or social enterprise.

(7)

In this section —

“
charity” has the meaning given by section 1 of the Charities Act 2011 ;

“
social enterprise” means an undertaking which—

(a)

has as its primary purpose the achievement of social or
environmental objectives, and

(b)

principally reinvests its profits for those purposes;

“
small or medium-sized enterprise” has the meaning given by section
465 of the Companies Act 2006 .

2 Employer pensions contributions pursuant to optional remuneration arrangements: Northern Ireland

(1)

In section 4 of the Social Security Contributions and Benefits (Northern Ireland)
Act 1992 (payments treated as remuneration and earnings), after subsection
(6) insert—

“(6A)

In any case where—

(a)

a benefit of a kind mentioned in section 308 or 308A of ITEPA
2003 (contributions to pensions schemes) is provided to or for the benefit of an employed earner pursuant to optional remuneration arrangements, and

(b)

the employed earner would be chargeable to income tax at the
higher or additional rate in respect of benefit if section 228A(5) of that Act had effect with the omission of paragraphs (f) and (g) (which refer to sections 308 and 308A),

regulations may make provision for the purposes of this Part for treating the amount foregone in relation to the benefit as remuneration derived from the earner’s employment.

(6B)

Regulations made under subsection (6A) must make provision for
amounts not exceeding the contributions limit for a tax year not to be so treated.

(6C)

The contributions limit is the amount specified by regulations made
under subsection (6A) as the contributions limit for the whole of a tax year; but—

(a)

the regulations may make other provision about that limit,
including provision prescribing an equivalent of that limit for earners paid weekly or at other intervals; and

(b)

if an equivalent is prescribed, the regulations may prescribe
an amount which exceeds by not more than £1 the amount which is the arithmetical equivalent of that limit.

(6D)

Regulations made under subsection (6A) —

(a)

may make provision for any amount treated as remuneration
to be treated as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of the earner’s employment;

(b)

may provide, in prescribed cases, for the amount treated as
remuneration to be an amount other than the amount foregone in relation to the benefit; and

(c)

may provide for that other amount to be calculated in such
manner and on such basis as may be prescribed.

(6E)

In cases where the contribution limit is exceeded, regulations must
make provisions for such amounts not be treated as earnings by virtue of the Education (Student Loans) (Repayment) Regulations 2009 (S.I. 2009/470), Part 4, Regulation 41.

(6F)

Expressions which are used in subsection (6A) and the benefits code
have the same meaning in that subsection as they have in that code.”

(2)

In section 172 of that Act (Assembly etc control), after subsection (11) insert—

“(11ZZA)

A statutory instrument containing (whether alone or with other
provisions) regulations under section 4 (6A) shall not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.

(11ZZB)

Subsection (11ZZA) does not apply to regulations under section 4 (6A) which make provision only for increasing the amount of the contributions limit for a tax year.”

(3)

The amendments made by this section have effect for the tax year 2029-30
and subsequent tax years.

(4)

The first regulations made under subsection (6A) of section 4 of the Social
Security Contributions and Benefits (Northern Ireland) Act 1992, as inserted by subsection (1) , must specify the contributions limit as £5,000 for a tax year (but subject to any provision made in reliance on subsection (6C) (a) or (b) of that section ).

(5)

The amendments made by this section do not apply where the employer—

(a)

is a small or medium-sized enterprise, or

(b)

is a charity or social enterprise which meets the conditions in
subsection (6) .

(6)

The conditions are that—

(a)

the employer meets the definition of a small or medium-sized
enterprise in section 465 of the Companies Act 2006 (companies qualifying as medium-sized: general), and

(b)

the employment is carried out wholly or mainly for the purposes of
that charity or social enterprise.

(7)

In this section —

“
charity” has the meaning given by section 1 of the Charities Act 2011 ;

“
social enterprise” means an undertaking which—

(a)

has as its primary purpose the achievement of social or
environmental objectives, and

(b)

principally reinvests its profits for those purposes;

“
small or medium-sized enterprise” has the meaning given by section
465 of the Companies Act 2006 .

3 Extent, commencement and short title

(1)

In this Act—

(a)

section 1 extends to England and Wales and Scotland,

(b)

section 2 extends to Northern Ireland, and

(c)

this section extends to England and Wales, Scotland and Northern
Ireland.

(2)

This Act comes into force on the day on which it is passed.

(3)

This Act may be cited as the National Insurance Contributions (Employer
Pensions Contributions) Act 2026.