There are two things that we have to look for when there are the annual changes to Class 1 National Insurance Contributions for the following tax year:
- Changes to the rates and
- Changes to the thresholds
The UK budget in October 2018 announced the following, followed up shortly after by clarification from HMRC.
Rates
There are no changes to the rates for 2019/20 from the rates that applied in 2018/19.
Budget 2011 announced that the basis for the indexation of the following would be in accordance with September’s consumer prices index (CPI) inflation to determine the lower earnings limit (LEL) and the primary threshold (PT). The Autumn Statement 2016 announced the alignment of the primary and secondary threshold (ST) which is the point at which the employer start to pay NICs.
For 2019/20, indexation means that the LEL, PT and ST were incremented by the rate of CPI as at September 2018 which is the September preceding the start of the tax yea.
The class 1 upper earnings limit (UEL) is aligned to the income tax higher rate threshold, i.e. the annual personal allowance plus the basic rate limit.
Following the Budget, HMRC announced the following thresholds from 2019/20:
|
Threshold |
Weekly |
2-weekly |
4-weekly |
Monthly |
Quarterly |
Annual |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Lower Earnings Limit |
118 |
236 |
472 |
512 |
1,534 |
6,136 |
|
Primary and Secondary |
166 |
332 |
664 |
719 |
2,158 |
8,632 |
|
Upper Earnings Limit |
962 |
1,924 |
3,847 |
4,167 |
12,500 |
50,000 |
The upper secondary threshold (UST) and the apprentice upper secondary threshold (AUST) remain aligned with the UEL.
The above will all be set by “Amendment Regulations” which will update the Social Security (Contributions) Regulations 2001.
There are two things that we have to look for when there are the annual changes to Class 1 National Insurance Contributions for the following tax year:
- Changes to the rates and
- Changes to the thresholds
The UK budget in October 2018 announced the following, followed up shortly after by clarification from HMRC.
Rates
There are no changes to the rates for 2019/20 from the rates that applied in 2018/19.
Budget 2011 announced that the basis for the indexation of the following would be in accordance with September’s consumer prices index (CPI) inflation to determine the lower earnings limit (LEL) and the primary threshold (PT). The Autumn Statement 2016 announced the alignment of the primary and secondary threshold (ST) which is the point at which the employer start to pay NICs.
For 2019/20, indexation means that the LEL, PT and ST were incremented by the rate of CPI as at September 2018 which is the September preceding the start of the tax yea.
The class 1 upper earnings limit (UEL) is aligned to the income tax higher rate threshold, i.e. the annual personal allowance plus the basic rate limit.
Following the Budget, HMRC announced the following thresholds from 2019/20:
|
Threshold |
Weekly |
2-weekly |
4-weekly |
Monthly |
Quarterly |
Annual |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
Lower Earnings Limit |
118 |
236 |
472 |
512 |
1,534 |
6,136 |
|
Primary and Secondary |
166 |
332 |
664 |
719 |
2,158 |
8,632 |
|
Upper Earnings Limit |
962 |
1,924 |
3,847 |
4,167 |
12,500 |
50,000 |
The upper secondary threshold (UST) and the apprentice upper secondary threshold (AUST) remain aligned with the UEL.
The above will all be set by “Amendment Regulations” which will update the Social Security (Contributions) Regulations 2001.