
1 

(1) These regulations may be cited as the 
Social Security (Contributions and Credits) (Transitional and Consequential
Provisions) Regulations 1985 and shall come
into operation on 6th October 1985.
(2) In these regulations—
 “the Act”
means the Social Security Act 1975;
 “the principal regulations”
 means the 
Social Security (Contributions) Regulations 1979;and other expressions have the same meanings as in that Act or,
as the case may be, those Regulations.
2 

(1) This regulation applies in the case of
a person—
(a) who on 6th October 1985 is a director
of a company and has been such a director continuously since 6th April 1985
and in respect of whose earnings, by virtue of 
regulation 6A(1) and (3)
of the principal regulations, the earnings period is the year commencing 6th
April 1985; or
(b) who on or after 6th October 1985 is a
director of a company and in respect of whose earnings the earnings period
falls to be determined in accordance with—
(i) regulation
6A(1) and (2),
or
(ii) regulation
6A(1) and (3)of the principal regulations, and which commenced during the period
from 6th April 1985 to 5th October 1985; or
(c) who is a person whose earnings, by virtue
of regulations 2, 
3, 5A, 
21 or 22
of the principal regulations, are assessed by reference to an earnings period
which is the year commencing 6th April 1985; or
(d) who after 5th April 1985 but before 6th
October 1985 ceased to be a director of a company and—
(i) in respect of whose earnings, by virtue
of regulation 6A(1) and 
(3) of the principal regulations, the earnings
period is the year commencing 6th April 1985, or
(ii) in respect of whose earnings, the earnings
period is determined by virtue of regulation
6A(1) and (2)
of the principal regulations,and is paid earnings in respect of any employed earner's employment
with that company at any time in the period from 6th October 1985 to 5th April
1986; or
(e) who—
(i) ceased to be a director of a company
before 6th April 1985, and
(ii) in respect of whose earnings, by virtue
of regulation 6A(1) and 
(5) of the principal regulations, the earnings
period is the year commencing 6th April 1985, and
(iii) is paid earnings in respect of any
period during which he was such a director at any time in the period from
6th October 1985 to 5th April 1986; or
(f) who—
(i) is a person whose earnings, by virtue
of regulations 2, 
3, 5A, 
21 or 22
of the principal regulations, are assessed by reference to an earnings period
which is the year commencing 6th April 1985, and
(ii) after 5th April 1985 but before 6th
October 1985 ceased to be employed in the employment from which those earnings
derived, and
(iii) is paid any such earnings in the period
from 6th October 1985 to 5th April 1986.
(2) In a case to which this regulation applies
no secondary Class 1 contribution shall be payable on such earnings as are
paid within an earnings period specified in 
paragraph (1) above as exceed an amount which
is the sum of—
(a) the equivalent amount for the upper earnings
limit for that earnings period calculated in accordance with 
regulation 8 of the principal regulations,
and
(b) half the amount whereby the earnings
paid in the earnings period exceed that equivalent amount, disregarding any
fraction of £1.
(3) Where the earnings period is the period
mentioned in paragraph 1(a), 
(b)(ii), (c), 
(d)(i), (e) or 
(f) above, for the purposes of 
section 4(6B) and (6E)
of the Act (incidence of Class 1 contributions) the appropriate percentage rates shall be—
(a) where the earnings in that earnings period
do not exceed £2859.95, in the case of primary and secondary Class 1
contributions, 5 per cent.;
(b) where the earnings in that earnings period
exceed £2859.95 but do not exceed £4679.99, in the case of primary
and secondary Class 1 contributions, 7 per cent.;
(c) where the earnings in that earnings period
exceed £4679.99, in the case of primary Class 1 contributions, 9 per
cent.;
(d) where the earnings in that earnings period
exceed £4679.99 but do not exceed £6759.95, in the case of secondary
Class 1 contributions, 9 per cent.;
(e) where the earnings in that earnings period
exceed £6759.95, in the case of secondary Class 1 contributions, 10.45
per cent..
(4) Where the earnings period is the period
mentioned in paragraph 1(b)(i)
or (d)(ii) above, for the
purposes of the said section 4(6B)
and (6E) the appropriate
percentage rate shall be obtained by dividing the amount of the earnings paid
in the earnings period by the number of weeks therein and by applying the
quotient as if it were a payment of weekly earnings.
3 

(1) Subject to 
section 8(2C) of the Act the
amount of a Class 3 contribution payable in respect of the year commencing
6th April 1985 shall be—
(a) in respect of the first 26 contribution
weeks of that year £4.65;
(b) in respect of the last 26 contribution
weeks of that year £3.40.
(2) Where contributions paid by or credited
to a person in respect of the year commencing 6th April 1985 are insufficient
to enable him to satisfy the contribution conditions of entitlement to benefit
by acquiring the requisite earnings factor for that year, then, subject to 
regulations 27 and 28
of the principal regulations, he may not pay more than 26 Class 3 contributions
at the amount of £3.40 and, where he has paid or there are payable Class
2 contributions at the rate of £3.50 (being the rate coming into force
on 6th October 1985) he may only pay a number of such Class 3 contributions
which, when added to the number of such Class 2 contributions, does not exceed
26.
(3) For the purposes of Class 3 contributions
in respect of the year commencing 6th April 1985, the contribution week commencing
31st March 1985 shall be treated as falling wholly in the year commencing
6th April 1984.
4 

(1) Sections
7A (late paid Class 2 contributions) and 8(2C)
(Class 3 contributions) of the Act shall be
modified in accordance with the following provisions of this regulation.
(2) In section
7A(3) for sub-paragraph (b)
to the end there shall be substituted—“
(b) the weekly rate of
ordinary Class 2 contributions for the week in respect of which the contribution
was payable in the contribution year differs from the weekly rate applicable
at the time of payment in the payment year,
the amount of the contribution shall be computed by reference
to the highest weekly rate of ordinary Class 2 contributions in the period
from the week in respect of which the contribution is paid to the day on which
it is paid.
”.
(3) In section
8(2C) for sub-paragraph (b)
to the end there shall be substituted—“
(b) the amount of a Class
3 contribution applicable had the contribution been paid in the contribution
year differs from the amount applicable at the time of payment in the payment
year,
the amount of the contribution shall be computed by reference
to the highest of those two amounts and of any amount of a Class 3 contribution
in the intervening period.
”.
5 

(1) The principal regulations shall be amended
in accordance with the provisions of this regulation.
(2) In regulation
1(2) of the principal regulations (interpretation)—

(a) in the definition of “non-contracted-out
rate” for the words from “the percentages”
to “section 4(6)”
 there shall be substituted the words “the appropriate
percentage rate for the time being specified in 
section 4(6B) or, as the case may be, (6E)”
;
(b) for the definition of “standard
rate” there shall be substituted“

 “standard rate”
 means the appropriate percentage rate
specified in section 4(6B)
of the Act for primary Class 1 contributions;
”.
(3) After regulation
8 of the principal regulations (equivalent
amounts) there shall be inserted the following regulation—“


8A 

(1) The amounts of the equivalent earnings
brackets for the purposes of section 4(6B)
and (6E) of the Act shall
be determined in accordance with the following provisions of this regulation.

(2) In this regulation 
“the lower bracket” means 
the lesser amount in each bracket specified in the said 
section 4(6B) and (6E)
and “the higher bracket”
means any greater amount therein specified.
(3) The respective equivalent lower brackets
shall be—
(a) where the earnings period is a multiple
of a week, the amounts calculated by multiplying each lower bracket by the
corresponding multiple;
(b) where the earnings period is a month,
the amounts calculated by multiplying each lower bracket by 4⅓;
(c) where the earnings period is a multiple
of a month, the amounts calculated by applying 
sub-paragraph (b) of this paragraph and multiplying
each product by the corresponding multiple;
(d) in any other case, the amounts calculated
by dividing each lower bracket by 7 and multiplying each quotient by the number
of days in the earnings period concerned.
(4) Each of the calculations prescribed in 
sub-paragraphs (b) and (d)
of the last preceding paragraph shall be to the nearest £0.01, and any
amount of £0.005 or less shall be disregarded.
(5) The respective equivalent higher brackets
shall be—
(a) in the case of brackets 1 and 2 in the
said section 4(6B)
and in the case of brackets 1 to 3 in the said 
section 4(6E), £0.01 less than the next
succeeding lower bracket.
(b) in the case of bracket 3 in the said 
section 4(6B), the upper earnings limit determined
in accordance with regulation 8
of these regulations (equivalent amounts).”
(4) Regulation
9 of the principal regulations (calculation
of earnings-related contributions) shall be amended as follows—
(a) in paragraph
(2) after the word “scale”
 there shall be inserted the words “or, for contributions
payable on earnings above the upper earnings limit or the prescribed equivalent
thereof, a contributions calculator;”
(b) for paragraphs
(3) and (4)
there shall be substituted the following paragraphs—“
(3) Where the amount of
earnings to which—
(a) the appropriate scale is to be applied
does not appear in the scale, the amount of contributions payable shall be
calculated by reference to the next smaller amount of earnings in the appropriate
column in the scale;
(b) the appropriate contributions calculator
is to be applied does not appear in the calculator, the amount of contributions
payable shall be calculated—
(i) by obtaining from the calculator the
amounts of contributions payable on the largest components of the earnings
provided for therein and
(ii) by adding the amounts of those contributions
together.

(4) Where a scale
or a contributions calculator would, but for the period to which it relates,
be appropriate and the earnings period in question is a multiple of the period
in the scale or, as the case may be, calculator, the scale or calculator shall
be applied by dividing the earnings in question so as to obtain the equivalent
earnings for the period to which the scale or calculator relates and—

(i) in the case of the scale, by multiplying
the amount of contributions shown in the scale as appropriate to those equivalent
earnings by the same factor as the earnings were divided;
(ii) in the case of the calculator, by multiplying
the amount of contributions shown in the calculator as appropriate to those
equivalent earnings or, where no equivalent earnings are shown, the amount
of contributions calculated in accordance with 
paragraph 3(b) above, by the same factor as
the earnings were divided.”;
(c) at the end of 
paragraph (5) there shall be inserted the words 
“, save that the contributions calculator may also be used where the
contributions have been calculated in accordance with 
paragraph (1)”.
(5) In regulation
12(1)(a) of the principal regulations (aggregation
of earnings paid in respect of different employed earner's employments by
different persons and apportionment of contribution liability) the words from 
“and the amount of” to “(or its equivalent)”
 shall be omitted.
(6) In regulation
32 of the principal regulations (return of
contributions)—
(a) in paragraph
(1) for the words from “half a
standard rate” to the words “lower earnings limit”
 there shall be substituted the words “one fifteenth
of a standard rate contribution payable on earnings at the upper earnings
limit in respect of primary Class 1 contributions”;
(b) in paragraph
2(d)(i) after the words “in excess
of 53 times the amount” there shall be inserted the words 
“, calculated at the appropriate primary percentage rate specified for
bracket 3 in section 4(6B)
of the Act,”.
(7) In regulation
43B(2) of the principal regulations (Class
2 contributions paid late in accordance with a payment undertaking) for the
words “in the year in which” wherever they appear
there shall be substituted the words “at the time when”
.
(8) In regulation
43C of the principal regulations (Class 2 and
Class 3 contributions paid within a month from notification of amount of arrears)
for the words “paid in the year” there shall be
substituted the words “paid on the last day of the year”
.
(9) In regulation
43D (Class 2 and Class 3 contributions paid
late through ignorance or error)—
(a) in paragraph
(2) and (3)
for the words “paid in the year in which” there
shall be substituted the words “paid at the time when”
;
(b) in paragraph
3(a) for the words “applicable
in the contribution year” there shall be substituted the words 
“applicable to the period for which the contribution is paid”
.
6 
In the principal regulations—
(a) in regulation
61(1)(a) (exception from Class 4 liability
by reference to Class 1 contributions paid on earnings chargeable to income
tax under Schedule D),
for the words “the figure specified in 
section 4(6)(a)” there shall
be substituted the words “the appropriate percentage rate specified
in section 4(6B)”
;
(b) at the end of 
regulation 67(1) (annual maximum of Class 4
contributions due under section 9(1)
of the Act) there shall be inserted the words “, or in the case
only of the year commencing 6th April 1985 equal to such higher money sum
and £218.”,
(c) in regulation
89 (modification of 
section 4(6) of the Act)—
(i) in paragraph
(1) after the words “
section 4(6)” there shall be
inserted the words “to 4(6E)”,
(ii) in sub-paragraph
(1)(a) for the words from “the
percentage rate” to the end there shall be substituted the words 
“the appropriate percentage rate of the primary Class 1 contribution
specified in section 4(6B)
of the Act and the reduced primary Class 1 contribution specified in 
regulation 104 of these regulations shall be
reduced by 0.25 and the appropriate percentage rate of the secondary Class
1 contribution specified in section 4(6E)
by 0.15.”,
(iii) in sub-paragraph
(1)(b) for the words from “the
percentage rate” to “
section 4(6)(b)” there shall
be substituted the words “the appropriate percentage rate of
the secondary Class 1 contribution specified in 
section 4(6E)”;
(d) for regulation
90(2)(b)(i) (earnings periods for mariners
and apportionment of earnings) there shall be substituted the following—
“
(i) the appropriate percentage
rate for a primary or secondary Class 1 contribution specified in 
section 4(6B) or, as the case may be, 
4(6E) of the Act,”
(e) in regulation
91 of the principal regulations (calculation
of earnings-related contributions for mariners)—
(i) in paragraph
(1)(a) at the end thereof there shall be inserted
the words “, save that in the case of a contribution payable
on earnings above the upper earnings limit or the prescribed equivalent thereof,
the appropriate contributions calculator prepared by the Secretary of State
may be applied”.
(ii) in paragraph
(2) at the end thereof there shall be inserted
the words “or, in the case of such a contribution payable on
earnings above the upper earnings limit or the prescribed equivalent thereof,
a contributions calculator appropriate to that rate, prepared by the Secretary
of State”;
(f) in regulation
115 (reduction of rate of Class 1 contributions)—

(i) in paragraph
(1) after the words “
section 4(6)” there shall be
inserted the words “to 4(6E)”;
(ii) in paragraph
(2) at the end thereof there shall be inserted
the words “, save that in the case of such contributions payable
on earnings above the upper earnings limit or the prescribed equivalent thereof,
the appropriate contributions calculator prepared by the Secretary of State
may be applied”;
(g) in regulation
133 of the principal regulations (reduction
of rate of secondary Class 1 contributions payable in respect of registered
dock workers)—
(i) in paragraph
(1) for the words from “the percentage
rate” to the end there shall be substituted the words 
“the appropriate percentage rate of the primary Class 1 contribution
specified in section 4(6B)
of the Act shall be reduced by 0.25 and that of the secondary Class 1 contribution
specified in section 4(6E)
of the Act by 0.15.”;
(ii) in paragraph
(2) at the end thereof there shall be inserted
the words “, save that in the case of a contribution payable
on earnings above the upper earnings limit or the prescribed equivalent thereof,
the appropriate contributions calculator prepared by the Secretary of State
may be applied”;
(iii) in paragraph
(3) at the end thereof there shall be inserted
the words “or, in the case of contributions payable on earnings
above the upper earnings limit or the prescribed equivalent thereof, a contributions
calculator appropriate to that rate, prepared by the Secretary of State”
.
7 
In regulation
3(2)(b) of the Social Security (Credits)
Regulations 1975 for the words “in 
section 4(6)(a)” there shall
be substituted the words “in relation to the highest current
primary earnings bracket in section 4(6B)”
.
Signed by authority of the Secretary of State for Social Services.

Trumpington
Parliamentary Under-Secretary of State
Department of Health and Social Security
6th September 1985