Can I transfer employer’s NICs to an employee if I have entered into a section 430 or 431 (ITEPA 2003) joint tax election with my employee in relation to an award of restricted securities?
A. Joint election and agreements may be used only with respect to NIC liabilities arising after the securities are acquired – typically the lifting of a restriction applying to those securities. A section 431 ITEPA tax election may be entered into such that employer & employee choose to crystallise their income tax and National Insurance liabilities on the full, unrestricted value of those securities at the time the employee acquires the securities. If so, there will be no further NIC liabilities after acquisition and, therefore, no problems for the employer in providing for a future unquantifiable liability. In this case a NIC election (and agreement) may not be applied to any of the NIC liability due on earnings from these securities. Alternatively, a section 431 tax election may be entered into such that at least one restriction is ignored at the time the securities are acquired, for the purposes of calculating tax and NIC liabilities, but at least one post-acquisition chargeable ev
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