Changes to national insurance rates
With all the coverage given to the Chancellor’s Spending Review Statement, it’s easy to forget that earlier announcements by the current and previous Governments have yet to take full effect.
In this connection the House of Commons debated the National Insurance Contributions Bill on 14 October 2010.
One of the measures covered by the Bill is to increase the rates of national insurance contributions from 6 April 2011. The national insurance thresholds will also increase from 6 April 2011, however these changes will be covered by other legislation.
The changes in the Bill will result in a 1% increase in national insurance rates so that the following new rates will apply from 6 April 2011:
- The main rates of Class 1 national insurance contributions (paid by employees) and Class 4 national insurance contributions (paid by the self-employed) will increase to 12% and 9% respectively.
- The ("jobs tax") Class 1 employer rate of national insurance contributions will increase to 13.8%. This increase will also apply to Class 1A and Class 1B NICs
- The additional rates of Class 1 (paid by employees) and Class 4 (paid by the self-employed) national insurance contributions will be increased to 2%.