Secondary NICs on termination awards and sporting testimonials

The National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 (Commencement and Transitional Provisions) Regulations, SI 2020/285, bring into force specific provisions in the Act relating to payment of employer class 1A NICs with effect from 6 April 2020.

The provisions brought into force are those which require:

• employers to pay class 1A NICs in respect of termination awards exceeding £30,000; and
• controllers of sporting testimonials to pay class 1A NICs on liabilities arising in respect of sporting testimonial payments.

The regulations also provide for transitional provisions, so that the obligations do not arise in relation to:

• termination awards received on or after 6 April 2020 for employments terminated before 6 April 2020;
• termination awards received in instalments where the first instalment of the termination award was received before 6 April 2020; or
• sporting testimonials that take place on or after 6 April 2020, but which were announced before 6 April 2020.