Old NIC's column. By David R. Harris LLM

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Members have asked for further coverage on AccountingWEB of National Insurance matters. David Harris is a barrister specialising in National Insurance matters and begins this occasional series by considering the earnings on which Class 1 contributions are payable.

It is popularly supposed that earnings for Class 1 purposes are equivalent to the amount on which tax is paid. There are, however, a number of differences which a prudent employer will take into account, and the more significant of these are considered below.

Deductible expenses

As is well known, expenses may only be deducted for tax purposes if they are wholly, exclusively and necessarily incurred in the performance of the duties of the employment. For National Insurance purposes, the rules are much less strict, the...

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21st Dec 2006 10:42

Oh yes it is!

In trying (but failing) to sound educated and sophisticated by using an affected style and tone and an affected (but incorrect) spelling, the author has only succeeded in making himself look silly.

I feel entirely justified in pointing this out even though I may only be a 'mere accountant'.

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19th Dec 2006 10:43

NIC's and loan write offs
I wonder if David could tell us his views on whether Class 1 NIC applies to loans written off where the borrower is both a director and a participator in the lender company.

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20th Dec 2006 15:37

Premia!!

Pension 'premia'!

Does he mean 'premiums'?

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21st Dec 2006 09:21

Impertinence!
He is a barrister and LL M. It is not for you as a mere accountant to criticise his grammar!

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21st Dec 2006 13:10

Joking aside
I have to say that this article is difficult to read because of poor grammar and archaic sentence construction. I also find it highly irritating that the writer keeps comparing NICs to "tax". NICs are tax.

That is not the only error. The assertion Most benefits in kind are taxable as employment income, but only those specifically brought within the definition of ‘earnings’ are subject to Class 1 contributions. The others attract Class 1A contributions is wrong. Some benefits in kind are not subject to NICs at all.

The assertion no Class 1A charge generally arises if the recipient is neither a director nor an employee earning more than £8,500 per annum is also incorrect. The legislation refers to those earning at the rate of £8,500 per annum or higher.

A barrister is expected to pay more attention to detail.


Is Peter Arrowsmith ill or something? His relaxed, flowing style would be far more appropriate.

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