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NATIONAL INSURANCE
The principal national insurance rates that will apply for 2000/01 are detailed in the table below.
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2000/2001 National Insurance Contributions (NICs)
|
| Class 1 - not contracted out |
Employer |
Employee |
|
|
|
| Weekly earnings bands |
|
|
|
| Payable on earnings |
|
|
|
| Up to £76 |
Nil |
Nil |
|
|
|
| £76.01 - £84 |
Nil |
10.0% |
|
|
|
| £84.01 - £535 |
12.2% |
10.0% |
|
|
|
| Over £535 |
12.2% |
£45.90 max |
|
|
|
| Men 65 and over and women 60 and over |
as above |
Nil |
| Class 1A- On benefits |
12.2% |
Nil |
|
|
|
| Class 2- Self employed |
£2.00 per week |
|
|
| Limit of net earnings for exception |
£3,825 pa |
|
|
|
| Class 3- Voluntary |
£6,55 per week |
|
|
|
| Class 4-*Self employed on profits |
7% |
|
|
|
| £4,385 - £27,820 |
£1,640.45 max |
|
|
|
*Exemption applies if state retirement age is reached by 6 April 2000 |
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NATIONAL INSURANCE AND INCOME TAX ALIGNMENT
In March 1999 the Chancellor announced that the thresholds for most National Insurance Contributions would be aligned with the threshold for Income Tax.
Beginning with alignment from April 1999 of the threshold for employers’ contributions, the exercise will be completed by April 2001, when the threshold for employees’ contributions will be fully aligned with the threshold for Income Tax.
In a further step towards alignment, Employers Class 1A NICs – until now charged only on car and car benefits – are payable in respect of most taxable benefits from April 2000.
EMPLOYERS' NICS REDUCED FROM APRIL 2001
In April 2001 the rate of employers’ NICs will be reduced from 12.2% to 11.9% (as a consequence of of the introduction at the same time of the Climate Change Levy).
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NIC TIP
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| If you are both employed and self-employed, you may be paying too much in NICs. The maximum payable for 1999/00 is £2,300.20. If you pay too much, you are entitled to a repayment. |
There are those who seem to have nothing else to do but to suggest modes of taxation to men in office. (MP in the House of Commons - 1842)
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