PART 3: NATIONAL INSURANCE
low-paid employees for the removal of the 20% tax band, the tax and NICs thresholds (both primary and secondary) were split apart for the first time since 2001.
From April 2009 The Upper Accrual Point (UAP) was introduced as the ceiling for state pension accrual. From 6th April 2009 employers and employees with occupational pension schemes are only entitled to contracted-out rebates on earnings between the Lower Earnings Level (LEL) and the UAP, NICs being due on earnings between the UAP and UEL at not contracted-out rates. All employers were required to record and report 4 bands of earnings within their payroll software and on their 2009/2010 annual returns until such time as the option to contract out was abolished for members of defined contribution pension schemes (April 2012). The rebates for defined benefit schemes will be abolished too in April 2016 when the single tier state pension is introduced. The Upper Earnings Limit (UEL) was harmonised with the higher rate tax threshold. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS From 22nd June 2010 to 5 September 2013 Regional NICs holiday introduced in certain geographic areas for new businesses, allowing for savings of £5,000 of employer NICs for each of first ten recruited employees into the business. From April 2011 Class 1 and Class 4 main rates increased by 1.0% to 12.00% and 9.00% respectively. The Class 1 employers’ rate was increased by 1.0% to 13.8%. Class 1A and 1B increased by 1.0% to 13.8%. The additional rate of Class 1 and Class 4 over the UEL/UPL for employees increased by 1.0% to 2.0%. The employee’s earnings threshold for NICs (primary threshold) increased to £139 p.a. to protect low earners from the increase. The employer’s (secondary NICs’ threshold) was set at £136 and was no longer aligned with the earnings threshold for tax - three thresholds across tax and NICs existed. From April 2012 Contracted-out rebates removed for DC schemes. Contracted-out rebates for DB schemes reduced by 0.5% for both employers and employees to 3.4% for employers and 1.4% for employees. No printing, copying or reproduction permitted. From April 2015 Employers NICs were abolished up to an Upper Secondary Threshold, for all employees who were under 21 at the point of payment. From April 2016 Contracted-out rebates removed for DB pension schemes. Upper Accrual Point becomes redundant and removed. Employers NICs abolished, up to an Apprentice Upper Secondary Threshold, for all apprentice employees who are under 25 at the point of payment. From April 2017 Limits and thresholds increase after two tax years and primary and secondary thresholds aligned
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