Class 1A NICs are paid by employers in respect of most benefits in kind provided to employees, for example, the use of a company car. There are no Class 1A employee contributions payable.
Class 1A NICs are due in respect of most benefits provided to:
Where a benefit is provided as part of a salary sacrifice or other optional remuneration arrangement (OpRA), special rules apply and the Class 1A NICs are calculated as a percentage of the relevant chargeable benefit.
Certain conditions must apply before Class 1A NICs are due. These conditions are that the:
There is a statutory exemption for qualifying trivial benefits in kind costing £50 or less. The tax-free exemption (and therefore exemption from Class 1A NIC) applies to small non-cash benefits like a bottle of wine or a bouquet of flowers given to employees. It also applies to any other BiK classed as 'trivial' that falls within the exemption. An annual cap of £300 is applicable to directors or other office-holders of close companies and to members of their families or households.