The Social Security (Contributions) (Amendment No. 3) Regulations 2026

Published: Wed 25th Mar 26

These Regulations, made by the Treasury with concurrence from the Secretary of State and the Department for Communities, amend the Social Security (Contributions) Regulations 2001 to specify payments that must be disregarded when calculating earnings for the purpose of earnings-related social security contributions.

Specifically, Regulation 2 introduces exemptions for amounts shielded from income tax under sections 316ZA (accommodation, supplies, and services used in employment duties) and 320D (flu vaccinations) of the Income Tax (Earnings and Pensions) Act 2003, bringing the contributions framework into alignment with the recent tax legislation changes and coming into force on April 6, 2026.

Arguments For

Intended to align Social Security Contribution rules with recent changes in income tax law (Finance Act 2026) regarding specific employment-related reliefs.
Provides clarity and removes potential contribution liabilities for employers and employees concerning tax-exempt benefits like necessary accommodation, supplies, services, and employer-provided flu vaccinations.
Reduces administrative burden by ensuring that amounts specifically exempted from income tax under ITEPA 2003 sections 316ZA and 320D are also disregarded when calculating earnings for National Insurance Contributions (NICs).
Supports employee welfare by formalizing the exemption for employer-funded flu vaccinations, encouraging uptake.

Arguments Against

While aligning NICs with Income Tax, the introduction of new exemptions requires administrative changes for payroll systems and HMRC processing, leading to short-term implementation challenges.
Restricting the scope of disregarded payments only to those explicitly listed in the new ITEPA sections might overlook other minor, customary expenses that could arguably be beneficial to disregard for NIC purposes, requiring future amendments.
Any changes to contribution calculations, even if small, necessitate updates to associated guidance for employers which could cause initial confusion regarding compliance.

STATUTORY INSTRUMENTS

2026 No. 343 SOCIAL SECURITY

The Social Security (Contributions) (Amendment No. 3) Regulations 2026

Made - - - -

24th March 2026

Laid before Parliament

25th March 2026

Coming into force - -

6th April 2026

The Treasury make these Regulations in exercise of the powers conferred by sections 3(2) and (3) of the Social Security Contributions and Benefits Act 1992( 1 ) and sections 3(2) and (3) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992( 2 ) and now exercisable by them( 3 ).

The Secretary of State and the Department for Communities concur in the making of these Regulations.

This heading identifies the instrument as secondary legislation made under UK law concerning Social Security, specifically numbered 2026 No. 343.

The Treasury enacted these Regulations on March 24, 2026, which were formally presented to Parliament the following day and set to take effect on April 6, 2026.

The authority for making the Regulations comes from specific sections of the Social Security Contributions and Benefits Act 1992 (applying to Great Britain) and the corresponding Northern Ireland Act.

The Secretary of State (responsible for work and pensions) and the Department for Communities (in Northern Ireland) agreed to their creation.

Citation and commencement

These Regulations may be cited as the Social Security (Contributions) (Amendment No. 3) Regulations 2026 and come into force on 6th April 2026.

The first operative rule formally names the legislation as the Social Security (Contributions) (Amendment No. 3) Regulations 2026.

This rule also confirms the date when the amendments become legally effective, which is April 6, 2026.

Amendment to the Social Security (Contributions) Regulations 2001

In Part 8 of Schedule 3 to the Social Security (Contributions) Regulations 2001( 4 ), after paragraph 8B insert-

8C. Any amount that is exempted from income tax under section 316ZA of ITEPA 2003 (accommodation, supplies and services used in employment duties: payment or reimbursement of expenses)( 5 ).
8D. Any amount that is exempted from income tax under section 320D of ITEPA 2003 (flu vaccinations)( 6 ).'.

This section introduces the core substantive change by modifying the Social Security (Contributions) Regulations 2001.

It directs insertion of two new paragraphs, 8C and 8D, into Part 8 of Schedule 3, which typically lists payments disregarded when calculating earnings for contributions purposes.

Paragraph 8C provides that any amount exempt from income tax under section 316ZA of the Income Tax (Earnings and Pensions) Act 2003 (concerning employer payments for necessary accommodation, supplies, or services) will also be disregarded for social security contributions calculations.

Paragraph 8D similarly disregards any amount exempt from income tax under section 320D of ITEPA 2003, specifically covering employer payments made for flu vaccinations.

24th March 2026

Stephen Morgan Taiwo Owatemi Two of the Lords Commissioners of His Majesty's Treasury

The Secretary of State concurs as indicated in the preamble. Signed by authority of the Secretary of State for Work and Pensions.

24th March 2026

Stephen Timms Minister of State Department for Work and Pensions

The Department for Communities concurs as indicated in the preamble. Sealed with the Official Seal of the Department for Communities on 24 March 2026

24th March 2026

Cherrie Arnold A senior officer of the Department for Communities

This segment contains the signature blocks formally authenticating the Regulations.

The Treasury Commissioners signed the instrument on March 24, 2026.

The Secretary of State for Work and Pensions, through a Minister of State, confirmed concurrence with the making of the Regulations on the same date.

Furthermore, the Department for Communities in Northern Ireland also concurred, authenticating their agreement by affixing their Official Seal on March 24, 2026, confirming Northern Ireland application, indicated by the signing officer's title.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) ('SSCR').

Regulation 2 inserts paragraphs 8C and 8D into Part 8 of Schedule 3 (payments to be disregarded in the calculation of earnings for the purposes of earnings-related contributions) to the SSCR, providing an exemption from earnings for certain accommodation, supplies and services and flu vaccinations.

A Tax Information and Impact Note covering these Regulations was published on 26th November 2025 and is available on the website https://www.gov.uk/government/publications/the-expansionof-workplace-benefits-relief. It remains an accurate summary of the impacts that apply to this instrument.

The Explanatory Note clarifies that the instrument modifies the 2001 Social Security (Contributions) Regulations (SSCR), although the note itself holds no legal force.

Regulation 2's function is explicitly detailed: inserting new paragraphs (8C and 8D) into Schedule 3, Part 8 to ensure specific benefits—certain accommodation/services and flu jabs—are disregarded when calculating the earnings base upon which earnings-related social security contributions are determined.

It also references an associated Tax Information and Impact Note published in November 2025, confirming that the anticipated positive impacts on workplace benefits relief remain relevant summary points for these Regulations.

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