Changes to the rates of NICs had been announced by the previous government and the current government confirmed that the rate changes would be made. From April 2011 a further 1% will apply to the rates applicable to employers, employees and the self-employed. The main rate of Class 1 (employee) NICs will be 12% and the Class 4 rate will be 9%. The employer rate will increase to 13.8%. The additional rate of Class 1 and 4 contributions payable will be increased from the current 1% to 2%.
Changes to the thresholds for next year have now been announced and the point at which NICs are payable will increase significantly from April 2011.
The level at which employees start to pay contributions will increase to £139 per week (the primary threshold) and for employers the weekly limit will be £136 (secondary threshold). The primary and secondary thresholds were aligned at £110 for 2010/11.
The upper earnings limit and the upper profits limit will continue to be aligned with the income tax higher rate threshold of £42,475.
Internet link: Treasury rates and thresholds
Posted – 04/01/2011