PART 3: NATIONAL INSURANCE
From 6th April 2012 rebates were abolished for contracted-out (COMP) DC schemes and were reduced for DB (COSR) schemes by 0.5%, to 3.4% for employers and 1.4% for employees. From April 2016 rebates for DB schemes were abolished to coincide with the introduction of the new single tier state pension. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS CLASS 1 AND 2 AGE EXCEPTION CERTIFICATE CA4140/CF384 Liability for payment of Class 1 or Class 2 National Insurance Contributions ceases at State Pension Age (SPA) which is progressively increasing from April 2010 - see PART4). At SPA employees are moved on to category letter C (prior to April 2016 was C not contracted out regardless of their pension scheme status), an employer-only charge. For the self-employed liability for Class 4 contributions, which is an annual charge, continues to the end of the tax year during which SPA is attained. Until September 2013 an employee staying in employment after attaining SPA could apply for a certificate from HMRC as evidence for their employer(s) that deductions should cease. Now either a birth certificate or passport must be used for the same purpose, a letter from HMRC to the employer is only provided where a passport or birth certificate is not available. Supporting letters may be obtained by application to: HMRC National Insurance Contributions Employer Office, Evening Work Centre, Benton Park View, Newcastle upon Tyne, NE98 1ZZ. Employers relying on passports and birth certificates should consult the calculator at https:// www.gov.uk/calculate-state-pension for the correct age at which to cease employee NICs deductions. DWP may still issue their own form of Age Exception Certificate. AGGREGATION OF EARNINGS Employees with two or more jobs generally fall within one of three categories and the calculation of NICs must be carried out accordingly:
each employer must calculate NICs in the normal way, ignoring the payments received in the other job(s); however, where employers are in business ‘in association’ with each other, earnings must be added together from each job and NICs calculated on the total, except where not reasonably practicable to do so. Carrying on business in association will apply where: o respective businesses serve a common purpose, and o such things as accommodation, personnel, equipment or customers are shared to a significant degree. No printing, copying or reproduction permitted. the calculation will depend on whether the employers are, or are not, in business in association with one another: o if they are: NICs are due from the employer who pays the employee
1. Employment with, and separately paid by different employers: •
2. Single payment of earnings for separate jobs with separate employers: •
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