National Insurance Contributions
Rates and limits (Table D)
The rates and thresholds for NIC were announced in the Autumn Statement. There are significant changes affecting employees within pension schemes, who may have been eligible for the lower ‘contracted-out’ rates of NIC. From 6 April 2012 these will only be available to members of the increasingly rare salary-related pension schemes, and the reductions in rate for both employee and employer will be less generous than before. Those within money-purchase employer pension schemes, and their employers, will be liable to the full rates of NIC.
This will represent an increase in contributions of £462 for the employer and £525 for the employee where salary exceeds £42,475.
Merging NIC and income tax?
The Chancellor repeated his intention to look for a way to combine NIC with income tax so that employers do not have to operate two different sets of rules on the same payroll. Further consultations will be carried out, but the differences between the two regimes continue to make this a difficult goal to achieve.