Spring Budget 2008

National insurance contributions

Class 1 (Employees)
Not Contracted out of State Second Pension S2P
2009/10 2008/09
Employee Employee

No NICs where earnings
are up to £110 a week
11% NICs on £110.01-£844 pw
1% NICs over £844 pw

No NICs where earnings
are up to £105 a week
11% NICs on £105.01-£770 pw
1% NICs over £770 pw
Employer Employer

No NICs on the first £110 pw
12.8% NICs over £110 pw

No NICs on the first £105 pw
12.8% NICs over £105 pw
Earnings limit or threshold 2009/10 2008/09
  Weekly Monthly Annual Weekly Monthly Annual
£ £ £ £ £ £
Lower limit (LEL) 95 412 4,940 90 390 4,680
NICs start 110 476 5,715 105 453 5,435
Upper accrual point 770 3,337 40,040 N/A N/A N/A
Upper limit (UEL) 844 3,656 43,875 770 3,337 40,040
Contracted-out S2P rebate 2009/10 2008/09  
Reduction on band earnings £95.01-£770 pw £90.01-£770 pw  
Employer rate reduction      
  • Salary-related scheme
 3.7% 3.7%  
  • Money-purchase scheme
 1.4% 1.4%  
Employee rate reduction 1.6% 1.6%  
Class 1A (Employers) 2009/10 2008/09  
Most taxable employee benefits 12.8% 12.8%  
       
Class 2 (Self-Employed) 2009/10 2008/09  
Flat rate £2.40 pw £124.80 pa £2.30 pw £119.60 pa  
If earnings over £5,075 pa £4,825 pa  
Class 4 (Self-Employed) 2009/10   2008/09  
On profits £5,715-£43,875 pa 8% £5,435-£40,040 pa 8%
  Over £43,875 pa 1% Over £40,040 pa 1%
Class 3 (Voluntary) 2009/10 2008/09
Flat rate £12.05pw £626.60 pa £8.10pw £421.20 pa
bullet point Introduction
bullet point Personal and trust taxation
bullet point Capital taxes
bullet point Business tax
bullet point Value added tax (VAT)
bullet point Miscellaneous issues
bullet point National insurance contributions

This summary has been prepared very rapidly and is for general information only. The proposals are in any event subject to amendment before the Finance Act is passed. It is recommended you seek competent professional advice before taking any action on the basis of the contents of this publication.