The government has announced that it intends to bring forward a legislative change to mandate employers operating in a Freeport or Investment Zone special tax site to provide their employee’s workplace postcode to HMRC if they are claiming the relevant secondary Class 1 National Insurance contributions (NICs) relief through their payroll, in due course.
The relief is conditional on 60% of the employee’s working time being in the tax site. The collection of this data, is claimed to be needed to help reduce employer error and enable assurance of claims by HMRC without generally requiring HMRC contacting the employer.
The government is publishing a four-week technical consultation on draft regulations. Following the consultation, secondary legislation will be brought forward in due course, allowing software developers time to make the changes ahead of implementation.
Consultation on mandating postcode provision for Freeports and Investment Zones NICs reliefs
This consultation explores regulations that make provision in relation to the zero-rate of secondary Class 1 NICs available to businesses located in Freeport or Investment Zone special tax sites in Great Britain.
Employers operating in a Freeport or Investment Zone special tax site can claim a NICsrelief, so they do not have to pay any employer NICs on up to £25,000 of the eligible employee’s earnings per year for up to 36 months.
The postcode to be provided on the FPS, will need to be the postcode in the special tax site where the eligible employee is expected to spend at least 60% of their working time.
Where an employee has an adjustment for the protected characteristics of disability, pregnancy and maternity and does not need to meet the 60% working time requirement to be eligible for the reliefs, the employer must still provide in their FPS return, the postcode for the address at which the employee works in the special tax site or would work except for the adjustment made to accommodate the protected characteristic.
The change is proposed to take effect from 6 April 2025
PAYadvice.UK 19/4/2024
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