NIM13308 - Class 1A NICs: liability for Class 1A NICs: Class 1A NICs on sporting testimonials: benefit-in-kind provided with proceeds
If the testimonial committee provide the sportsperson with continuing use of a taxable benefit-in-kind that also gives rise to a Class 1A liability (such as a sponsor鈥檚 car), the P11D(b) process will apply to those Class 1A NICs liabilities. See NIM15000.
If the testimonial committee provide the sportsperson with a benefit (say, a car) which they are allowed to keep, then the value of the car is included in the testimonial award.
There is a hierarchy (order of priority) of payments so that if the sportsperson is given a cash payment in their testimonial and the provision of taxable BIK, both giving rise to a Class 1A liability, apply the 拢100,000 threshold to the cash element first.
Example
If the sportsperson receives 拢90,000 cash payment and BIK worth 拢20,000, then we set the 拢100,000 exemption against the cash element, leaving 拢10,000 exemption left to set against the BIK, whereby the actual amount then liable to Class 1A is 拢10,000 of the BIK.