NIM25012 - Class 3 NICs: Restrictions on the right to pay: precluded Class 3 NICs: where the earnings factor is less than the qualifying earnings factor by less than half the LEL

Regulation 49(1)(d) Social Security (Contributions) Regulations (SSCR) 2001

Regulation 3 Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations (SSCTCNINR) 2001

As explained in NIM25001, a person is not entitled to pay (i.e. is precluded from paying) Class 3 NICs in certain circumstances. One of those is that they cannot pay a Class 3 contribution for any tax year if it would cause the aggregate of their earnings factors (EFs), which is derived from:

  • earnings on which primary Class 1 NICs have been paid (for the 2003/04 and subsequent tax years, earnings on which primary NICs at the main primary percentage rate (main rate) have been paid (see NIM01110)); or
  • credited earnings; or
  • Class 2 NICs paid; or
  • Class 3 NICs paid or credited,

to exceed that tax year바카라 사이트檚 qualifying EF (QEF, see NIM25001) by half, or more than half, of the lower earnings limit (LEL). This is because regulation 3 of SSCTCNINR 2001 provides for a credit of Class 3 contribution where in any year there is a shortfall in the QEF of half that tax year바카라 사이트檚 LEL or less. Essentially a customer is precluded from paying because they will already get a Class 3 credit.

For the meaning of 바카라 사이트渃redited바카라 사이트� for the purposes of the above, see NIM25008.

Example

For the 2017-18 tax year:

  • the weekly LEL is 拢113
  • the QEF is 拢5,876
  • Mr Bixby has an earnings factor from Class 1 NICs at the main rate of 拢5,826.

As Mr Bixby is only 拢50 short of a QEF, which is less than half that tax year바카라 사이트檚 LEL (拢113), he will be automatically credited with a Class 3 contribution under regulation 3 of SSCTCNINR 2001. He is therefore precluded from paying a Class 3 contribution under regulation 49(1)(d) of SSCR 2001.

For details of the other circumstances in which a person is precluded from paying Class 3 NICs, see NIM25006 - NIM25011 and NIM25013 바카라 사이트� NIM25017.