National Insurance
No employer NICs for employees under 21 9 April 2015
A reminder that employers are now able to benefit from the abolition of employer National Insurance contributions for under 21s.
From 6 April 2015 employer National Insurance contributions for employees under the age of 21 are no longer payable on earnings up to the Upper Secondary Threshold.
GOV.UK has an employer guide and also calculation examples (using the rates that apply for the 2015 to 2016 tax year).
Follow this news link to read a short CIPP article which provides further details of the abolition.
Abolition of employer NICS for apprentices under the age of 25 21 May 2015
HMRC’s Software Developers Support Team has provided a brief detailing the zero rate changes coming into force in April 2016.
Briefing for Software Developers
Background
The National Insurance Contributions Act 2015 provides that from 6 April 2016 employers of certain apprentices under the age of 25 will no longer be required to pay secondary Class 1 National Insurance contributions (NICs) on earnings up to a new Apprentice Upper Secondary Threshold (AUST).
The AUST for the tax year 2016/17 will be equal to the Upper Earnings Limit for tax year 2016/17.
The relief will introduce a zero rate of secondary Class 1 NICs on earnings up to the AUST, for qualifying apprentices from 6 April 2016 and will apply to both new and existing apprentices.
The calculation of primary Class 1 NICs is unaffected.
This is a permanent change to the structure of NICs. In similar fashion to the zero-rate of NICs for employees under the age 21, there will be no change to the Class 1 NICs assessment rules already in place.
The full rate of secondary Class 1 NICs will continue to be due on earnings above the AUST.
Data suggests that there are around 180,000 employers offering apprenticeships in the UK.
Work is underway to define what constitutes a qualifying apprentice to enable employers to apply the correct rate of NICs. The definition of a qualifying apprentice for the purposes of the Apprentice’s zero rate will be provided in regulations and will be available later in the year.
Delivery
The relief will be delivered by introducing two new National Insurance (NI) category letters
New Category ‘H’ - standard rate contributions for Apprentices under age 25, and New Category ‘G’ – standard rate contributions for Apprentice Mariner under age 25.
The emerging solution however will give the ability from one year to the next to:-
Change the age range for qualifying apprentices, and Vary the level of earnings at which the AUST is set.
For 2016/17, employees considered as eligible apprentices aged sixteen up to twenty five will have zero rate of Class 1 secondary NICs on earnings below the AUST.
CIPP Policy News Journal
25/04/2016, Page 229 of 453
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