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contracting out
Budget 2013 – National Insurance Contributions
Employment Allowance Effective April 2014, all businesses and charities will be eligible for an Employment Allowance in the sum of £2,000.00, which will be offset against their secondary NICs liability. The intention is that this will primarily help the small employer. The Government is going to consult further on this. Contracting-Out As a result of [...]
State Pension Reforms
On 14 January 2013, the Government presented its long-awaited White Paper on plans to introduce a flat rate, Single-Tier Basic State Pension (BSP). This is a detailed document as part of the Coalition Government’s stated aim of reforming the State pension system. Whilst we digest the entire contents of the 108 pages, we provide a [...]
Employer Bulletin No 40
HMRC’s February 2012 Issue 40 is an excellent and comprehensive compilation of facts and information that we need to be aware of on a day-to-day basis. This issue covers articles and tables on: Income tax rates and bands for 2012/13 NICs rates and bands for 2012/13 Student Loan amended threshold for 2012/13 Statutory rates for [...]
Abolition of Contracting-Out on a Defined Contribution Basis
We have published this information before; however, the start of 2012 is a good time to repeat this as a reminder. Contracting-out of the State Second Pension (S2P) on a DC basis will be abolished from 06 April 2012. Contracting-out of the State scheme on a Salary-Related basis (COSR) is not affected. This has the [...]
Abolition of contracting-out on a defined contribution basis
HMRC’s latest PAYE Update reminds payroll software developers and employers of what they need to do to prepare for abolition of defined contribution contracting-out from April 2012. It will be each employer’s responsibility in April 2012 to allocate the correct NI Table Letter to those employees affected by the withdrawal of contracting-out for all pension [...]
Abolition of contracting-out on a defined contribution basis
HMRC gives further information on the impact of abolition from April 2012. From April 2012, all contracted-out “defined contribution” (DC) pension schemes will revert to “not contracted-out” schemes and, depending on their earnings levels, employees in such schemes will start to accrue pension benefits under the State Second Pension scheme. Schemes that are “defined contribution” [...]
Contracting-out Rebates
The Government is required by law to review actuarially the National Insurance contracting-out rebates for defined benefit and defined contribution pension schemes every five years. The rates that will apply from April 2012, subject to confirmation, have been announced in a draft Statutory Instrument. The contracting-out rebates for defined benefit schemes apply to contracted-out salary [...]
Should table letter C be used for employees over state pension age who are still contributing to a contracted-out pension scheme?
Contracted-out employment starts at age 16 and ends when the employee reaches the state pension age. The flowchart on page 3 of the CA41 NICs Tables (for Table Letters B and C) is very specific. If an employee is at or above the state pension age table letter C must be used, even if the [...]
Clarification of issues about abolition of contracting out of defined contribution pension schemes
From 6 April 2012, only pension schemes that contract out on a Defined Benefit (DB) basis, i.e. contracted-out salary related (COSR) schemes, will be able to contract out of the State Second Pension. Abolition of contracting-out applies only to schemes that are currently contracted out on a Defined Contribution (DC) basis, i.e. contracted-out money purchase [...]
