[UK] National Insurance Thresholds 2020/21

On the 30^th of January 2020, the government announced the National Insurance rates and thresholds for 2020/21.  This makes good on the Conservative’s pledge to raise the starting point to £9,500 annually.  The government announced this as a tax cut with a “typical employee” paying around £104 less in National Insurance then in 2019/20.

As was expected, the announcement and the supporting legislation means that the starting point for contributions is different for employees compared to that for employers.  This comes after years of the two being aligned.  All of the other thresholds rise in line with inflation as follows except the UEL which is frozen: 

(The UST and AUST are also unchanged as these are the same values as the UEL).

Global Payroll Association Comment 

The announcement of the thresholds says that the upper NICs threshold remains frozen at £50,000, as announced at Budget 2018.  This announcement was actually about the point at which employees start to pay tax at the higher rate.  The UEL is aligned to this value which gives us an indication that the March budget will not change this for 2020/21 (and it’s in legislation anyway to stay at £50,000) 

On the 30^th of January 2020, the government announced the National Insurance rates and thresholds for 2020/21.  This makes good on the Conservative’s pledge to raise the starting point to £9,500 annually.  The government announced this as a tax cut with a “typical employee” paying around £104 less in National Insurance then in 2019/20.

As was expected, the announcement and the supporting legislation means that the starting point for contributions is different for employees compared to that for employers.  This comes after years of the two being aligned.  All of the other thresholds rise in line with inflation as follows except the UEL which is frozen: 

(The UST and AUST are also unchanged as these are the same values as the UEL).

Global Payroll Association Comment 

The announcement of the thresholds says that the upper NICs threshold remains frozen at £50,000, as announced at Budget 2018.  This announcement was actually about the point at which employees start to pay tax at the higher rate.  The UEL is aligned to this value which gives us an indication that the March budget will not change this for 2020/21 (and it’s in legislation anyway to stay at £50,000)