BUDGET REPORT

9 MARCH 1999

NATIONAL INSURANCE

The principal national insurance rates that will apply for 1999/2000 are detailed in the table below.

1999/2000 National Insurance Contributions (NICs)

Class 1 - not contracted out            Employer             Employee

Weekly earnings bands
Payable on earnings
Up to £66                                                 Nil                         Nil

£66.01 - £83                                             Nil                       10.0%

£83.01 - £500                                          12.2%                   10.0%

Over £500                                                12.2%                £43.40max

Men 65 and over and 

women 60 and over                                as above                    Nil

Class1A - On car & car fuel benefits            12.2%                    Nil
Class 2  - Self employed                                         £6.55 per week
                Limit of net earnings for exception            £3,770 pa
Class 3  - Voluntary                                               £6.45 per week
Class 4*- Self employed on profits                           6%
                £7,530 -£26,000                                     £1,108.20 max.

*Exemption applies if state retirement age is reached by 6 April 1999.

NICs - NEW STRUCTURAL CHANGES

The new rates of NICs coming into effect on 6 April 1999 represent the first stage in a re-alignment of NICs with Income Tax.

Over the next two years the NIC thresholds for employers, employees and the self-employed will be aligned with the single person's tax allowance - £83 per week from 6 April 1999.

The NIC holiday is to be phased out by restricting its application to employments beginning before 31 March 1999.

With effect from 6 April 1999 the Contributions Agency will transfer from the Department of Social Security to the Inland Revenue.