Corporation Tax Act 2009 section 1131A

Sections 1129 and 1131: secondary Class 1 NICS paid by company

Section 1131A allows a company to include secondary Class 1 National Insurance contributions it pays on deemed direct earnings in its qualifying expenditure on externally provided workers for R&D relief purposes.

• When a company makes a staff provision payment and is treated as making a payment of deemed direct earnings calculated by reference to that payment, any secondary Class 1 NIC paid on those deemed earnings can be added to the qualifying expenditure.
• The staff provision payment amount is treated as increased by the NIC amount when calculating qualifying expenditure on externally provided workers, whether the parties are connected or unconnected.
• Where connected persons are involved, the aggregate relevant expenditure of each staff controller is also treated as increased by the NIC amount.
• The increase does not apply to the extent that the cost of the NIC is met directly or indirectly by a staff controller rather than by the company itself.