Pre Budget Report 2009 - National Insurance Contributions
Rates and limits: 2010/11
The rates of National Insurance Contributions, and the thresholds at which they apply, nearly all remain the same in 2010/11 as they are in 2009/10.
There is a £2 increase in the employees' Lower Earnings Limit (to £97 per week) above which entitlement to State Pension is earned, but no NIC are payable by either the employer or the employee until the Primary Threshold at £110 per week.
Rates and limits: 2011/12
Last year we were told that the main rates of NIC would rise by 0.5% in 2011/12. This has now been revised further upwards:
Employees' Class 1 NIC will rise from 11% to 12% from the Primary Threshold up to the Upper Earnings Limit, and from 1% to 2% above that
Employers' Class 1 NIC will rise from 12.8% to 13.8% on earnings above the Primary Threshold
Employers' Class 1A NIC on benefits will also rise from 12.8% to 13.8%
Self-employed Class 4 NIC will rise from 8% to 9% from the lower to upper profits limits, and from 1% to 2% above that
To offset the effect of this increase on lower-paid workers, the lower threshold will increase by £570 more than the rate of inflation in April 2011. This is supposed to mean that only those earning more than £20,000 will pay more in NICs as a result. Recent attempts to set the thresholds for income tax and NICs at the same levels have clearly been abandoned.
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