NIM13303 - Class 1A NICs: liability for Class 1A NICs: Class 1A NICs on sporting testimonials: contractual and non-contractual sporting testimonials
In many cases sportspersons have a contractual arrangement with their employer that they will be entitled to have a testimonial arranged on their behalf, whereby they will receive a payment from the income raised. Often this will be a clause in their employment contract which provides that if the sportsperson stays with the team or club for a specific number of years, they will be entitled to a testimonial, although the agreement can also cover other matters such as a sportsperson getting injured and having to end their playing career. All such income is treated as earnings from the sportsperson바카라 사이트™s employment with that club and the sportsperson (employee) is liable to income tax and primary Class 1 NICs on that income whilst the employer has to pay secondary Class 1 employer NICs on it.
How much income tax and primary Class 1 NICs the employee has to pay will depend on the National Insurance contributions rates that apply to them at the time they receive the payment.
It therefore follows that a non-contractual testimonial will be one where there is no contractual arrangement between the employer and the sportsperson that the employer will provide the sportsperson with a testimonial.