National Insurance limits
National Insurance is a separate tax (or contribution) payable in addition to Income Tax. NICs are meant to fund social security benefits such as an entitlement to the State Pension. The amount of NICs payable by taxpayers depends on the level of their income and their employment status.
Two new National Insurance Regulations come into force on 6 April 2014. The first regulation specifies the levels of the Lower Earnings Limit (LEL), the Upper Earnings Limits (UEL), the Primary Threshold (PT) and the Secondary Threshold (ST) for Class 1 NICs for the 2014/15 tax year. The instrument also sets the monthly and annual prescribed equivalents of the PT and ST.
|2014/15 – Weekly||2013/14 – Weekly|
|Lower earnings limit||£111||£109|
|Upper earnings limit||£805||£797|
|Primary earnings threshold||£153||£149|
|Secondary earnings threshold||£153||£148|
The second regulation specifies the rates of Class 2 and Class 3 National Insurance contributions (NICs) and the amount of earnings below which an earner may be excepted from liability for Class 2 contributions.
|Flat rate||£2.75pw, £143pa||£2.70pw, £140.40pa|
|Small earnings exception||£5,885pa||£5,725pa|
Over £41,865pa: 2%
Over £41,450pa: 2%
The flat rate for Class 3 contributions increases to £13.90pw (2013/14: £13.55pw).