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National Insurance Contributions
National Insurance and Self-Employed Entertainers
Thursday, May 23rd, 2013This is another issue which, interestingly enough, was covered on our Helpdesk last week. It concerns the topic of National Insurance Contributions that are due on earnings paid to self-employed entertainers, e.g. actors and musicians who are performing under a contract for services rather than a contract of services. Our Helpdesk query asked whether such [...]
National Insurance Thresholds and Rates 2013/14
Tuesday, December 11th, 2012Further to our Autumn Statement ‘special’ last week, HMRC have advised all of the National Insurance thresholds that will apply from the new tax year: NICs Thresholds Weekly Fort-nightly Four-weekly Monthly Yearly Lower Earnings Limit (LEL) 12/13 £107 £214 £428 £464 £5,564 13/14 £109 £218 £436 £473 £5,668 Primary Threshold (PT) 12/13 [...]
National Insurance Rates and Thresholds
Thursday, December 6th, 2012National Insurance Contributions (Class 1) Following the Autumn Statement, HMRC made available the rates and thresholds that will apply in 2013/14. The percentage rates remain unchanged from 2012/13 with thresholds as follows: Employee Thresholds Weekly 2012/13 2013/14 Change £ £ £ Lower Earnings Limit (LEL) 107 109 +2 Primary Threshold (PT) 146 149 +3 Upper [...]
Class 1 NICs Exemption for Certain Apprentices and Students Coming to the UK – Repeal of Relief
Sunday, December 11th, 2011Regulation 145(3) of the Social Security (Contributions) Regulations 2001 provides an exemption from Class 1 NICs for the first 52 weeks of employment for an employee who is not ordinarily resident in the UK in the following circumstances: Student Exemption – where the UK employment occurs during a vacation from a course of full time [...]
Income tax and National Insurance proposals for 2011/12
Friday, February 25th, 2011On 15 February, the Treasury Minister announced that no changes are proposed to income tax allowances and rates and Class 1 NICs rates for the tax year commencing 6 April 2011. The changes to NICs thresholds are proposed as follows: lower earnings limit, from £97 to £102 per week upper earnings limit, from £730 to [...]
“Lost” national insurance contributions
Friday, January 28th, 2011HMRC has responded with some indignation at recent press reports that £billions in NICs have been lost to employees. For example, one newspaper stated “A HUGE blunder by the taxman could rob millions of people of part of their pension savings.” This followed the release of figures by HMRC of substantial monies not allocated to [...]
New Pensions Bill to make final changes to workplace pensions and automatic enrolment
Friday, January 21st, 2011The latest Pensions Bill was introduced in the House of Lords on 12 January. The two key areas of interest are the revised timetables for increasing the State Pension age for women to 65, and for both men and women to 66, and amendments to the existing provisions in the Pensions Act 2008 for the [...]
Modified NICs arrangements under EP Appendix 7A or 7B
Thursday, January 13th, 2011HMRC has identified common errors made by employers who use EP Appendix 7A and 7B procedures. This following article was published on 6 January 2011 and provides guidance which should help employers to follow the procedures correctly. EP APP7A – Modified Class 1 and Class 1A National Insurance contributions for expatriate employees subject to an [...]
New operational guidance for employer compliance
Friday, December 31st, 2010A project to modernise HMRC’s compliance operational guidance has produced updated material to replace the Employer Compliance Handbook. The Compliance Operational Guidance Manual covers the way in which compliance checks are conducted by HMRC, setting out the correct processes for starting, conducting and completing compliance checks. It does not, however, consider case law and does [...]
Statutory payment rates and thresholds for 2011/12
Friday, December 10th, 2010The new tax and NICs rates and thresholds for 2011/12 were announced by the Treasury on 2 December, followed by the new statutory payment rates from the Department for Work and Pensions. In general they reflect the 4.6% increase in retail prices in the year to September 2010. The legislation for the increases in the [...]
Ensuring employer payments are allocated correctly
Friday, December 10th, 2010The latest weekly informal update (dated 3 December) from HMRC to employer representatives provides information on two subjects. One of them is reproduced below; the other is a separate news item. Employers often tell us that they don’t understand the payment allocation process within HMRC and that it is difficult for them to track payments [...]
How are NICs calculated for a director who joins mid-year?
Thursday, November 18th, 2010The calculation of primary and secondary Class 1 NICs for company directors is the same as for employees in general, except that an annual earnings period is used. The effect on the director of applying an annual earnings period is that no primary NICs are due until the director’s earnings in the year to date [...]
Employees posted to work in Japan to pay Ireland social insurance for up to five years
Friday, November 12th, 2010Ireland signed an Agreement on Social Security with Japan on 5 November and it comes into force on 1 December 2010. Its main purpose is to protect the pension rights of migrant workers who move between Ireland and Japan. It is estimated that there are about 2,000 Japanese people in Ireland and approximately 1,500 Irish people [...]
Is there any significance in the format of a National Insurance number?
Thursday, October 28th, 2010National Insurance numbers are allocated by the Department for Work and Pensions (DWP) and, in the context of payroll, are the reference number by which HMRC identifies each individual’s income tax account and National Insurance contribution record. The number is a critical data item in each employee’s payroll record. It is used by DWP in [...]
Spending Review reveals Government intentions for the State Pension age, auto-enrolment and real-time information
Thursday, October 21st, 2010The Chancellor presented his four-year Comprehensive Spending Review to Parliament on 20 October. There were three matters of note to report. State Pension age One of the Coalition government’s policy announcements in its Emergency Budget in June was to review the date at which the State Pension age (SPa) would rise to 66, and a [...]
New National Insurance Contributions Bill confirms new NICs rates from April
Wednesday, October 20th, 2010The Coalition government announced early after coming to power that the 2011/12 increases in Class 1 NICs rates announced by the Labour government in the 2009 Pre-Budget Report (PBR) would be applied unchanged. The promised National Insurance Contributions Bill, introduced in Parliament on 14 October, sets out the new rates as follows: the main primary [...]
HMRC describes current status of the P800 tax refund and underpayment exercise
Wednesday, October 20th, 2010As reported in an earlier newsletter, HMRC started to send out in early September a letter direct to individual taxpayers, informing them that HMRC’s records indicate that they have paid too much or too little tax for the tax years 2008/09 or 2009/10 tax years. The letter is accompanied by a P800 Tax Calculation form [...]
Are lump sum motoring expenses liable for NICs as earnings, or exempt up to to 40p per mile?
Friday, October 15th, 2010In a decision given on 12 August 2010 in the case Total People Ltd v Revenue & Customs, the First Tier Tax Tribunal allowed an appeal against an HMRC decision that lump sum payments paid for motoring expenses were part of the salaries of the employees concerned and therefore subject to Class 1 NICs. Where [...]
What can be done to minimise the problem of missing NI numbers?
Thursday, October 14th, 2010Most employers have difficulty in obtaining a National Insurance number for every employee. Some new employees are just very lax in providing their number. It can take months for an employee from outside the UK to obtain an NI number. In an organisation with many sites, demands from a centralised payroll office for NI numbers [...]
What is the difference between a “pay period” and an “earnings period”?
Tuesday, October 5th, 2010Pay period The term “pay period” does not appear, as might be expected, in the income tax legislation. The term appears frequently in employment and social security legislation in the context of maternity, paternity and adoption pay periods, e.g. “maternity pay period”. It is used once in the Social Security (Contributions) Regulations 2001 in connection [...]
