National Insurance on the rise!
Although announced some time ago, it is worth remembering that there is to be a 1% increase in all types of National Insurance (NI) contributions from April 2011. After these rises, the rates will be:
- Employee Class 1: 12%
- Employer Class 1: 13.8%
- Self employed Class 4: 9%
- Additional rate for higher earners: 2%
Whilst there will be adjustments to the starting point at which an individual will pay NI, for many these changes will lead to a reduction in the pay packets of employees and increased wage costs for the employer.
For the self employed, this increase has been in part offset by the increase in the levels of profits on which NI is due, from £5,715 to £7,225, meaning an additional £1,510 of profits can be earned before NI is due.
If you are unsure about how these rate changes will affect you, please let us know.