Cookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.
2020/21 NIC rates and thresholds confirmed
Newsletter issue - March 2020.
Around 31 million taxpayers are expected to benefit from an increase in take home pay from April 2020 when the National Insurance Contributions (NIC) threshold rises from £8,632 to £9,500 per year.
A typical employee will save around £104 in 2020/21, while self-employed people, who pay a lower rate, will have around £78 cut from their bill.
All the other thresholds will rise with inflation, except for the upper NICs thresholds which will remain frozen at £50,000, as announced at Budget 2018.
2020/21 rates and threshold are as follows:
Primary/employee Class 1 NICSs:
Lower earnings limit (LEL):
- £120 weekly
- £520 monthly
- £6,240 yearly
Primary threshold (PT):
- £183 weekly
- £792 monthly
- £9,500 yearly
Upper earnings limit (UEL):
- £962 weekly
- £4,167 monthly
- £50,000 yearly
Rate on earnings up to PT : 0%
Rate above PT: 12% on £183.01 to £962 weekly, 2% on excess over £962 weekly
Reduced rate: 5.85% on £183.01 to £962 weekly, 2% on excess over £962 weekly
Secondary/employer Class 1 NICs:
Secondary earnings threshold (ST)
- £169 weekly
- £732 monthly
- £8,788 yearly
Upper secondary threshold (UST) for under 21s
- £962 weekly
- £4,167 monthly
- £50,000(yearly
Apprentice upper secondary threshold (AUST) for under 25s
- £962 weekly
- £4,167 monthly
- £50,000 yearly
Rate: 13.8% on earnings above the ST/UST/AUST
Employment allowance: £3,000 per year, per employer
Class 2 NICs:
Rate: £3.05 per week
Small profits threshold: £6,475
Class 3 NICs:
Rate: £15.30 per week
Class 4 NICs:
- Annual lower profits limit: £9,500
- Annual upper profits limit: £50,000
Rate on profits between lower and upper limits: 9%
Rate on profits exceeding upper profits limit: 2%.
In announcing the rates, the former Chancellor confirmed the government commitment to keeping tax low to ensure people keep more of what they earn. Ministers have pledged that the rates of income tax, National Insurance and VAT will not rise, and the government has set out an ambition to raise the National Insurance thresholds to £12,500, putting almost £500 a year into people's pockets.
JOIN OUR NEWSLETTER
Sign up with your email to get updates about
resources releases, tax news and special offers.
- GET A FIXED QUOTE
- BUSINESS ADVICE
- PERSONALISED SERVICE
Saving money on your Mileage and Tax Bill
Are you like many of our clients, somewhat struggling at keeping track of your mileage to offset... Read More
Posted on Wed, 19 Aug 2015
TWITTER
Tweets by @OWSupportOne of the headline areas of tax reform in the Autumn Budget surrounded Capital Gains Tax. With rates altered by the Chancellor, it was one of the...
Tax rules for individuals and companies using alternative finance are to change. The Government released plans for reform on the day of the Autumn...
With Christmas soon arriving, you may be planning a festive party for your employees or on behalf of the company you work for....
Plans to change tax compliance rules for charities are moving forward, as the new Government picks up proposals for reform to prevent misuse....
Q: I own a second home worth £400,000, which I bought for £250,000 and I have shares valued at £50,000, which I purchased for...
19 December - For employers operating PAYE, this is the deadline to send an Employer Payment Summary (EPS) to claim any reduction on what you’ll...