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Although the conditions imposing a Class 1A NICs liability may be satisfied, see NIM13021, there are certain circumstances where the legislation specifically exempts a benefit in kind and in some cases, cash payments, from Class 1A NICs liability. These exemptions fall into six categories and apply where the benefit is:

• exempt from income tax under ITEPA 2003 by a specific tax exemption, see NIM14101
• benefit provided mainly for business use, private use is not significant, see NIM14105
• included in a dispensation, see NIM14200
• covered by an Extra-Statutory Concession, see NIM14300
• included in a PAYE Settlement Agreement, see NIM14400
• specifically exempted from Class 1A NICs, see NIM14500.

Note that, in general, NICs legislation, including that covering Class 1A NICs, uses the term ‘exception� or ‘disregard�. The equivalent tax term is normally ‘exemption�. In the context of Class 1A guidance all three terms have the same meaning.