The Treasury is to raise the national insurance thresholds for 2020/2021, saving the average employee around £104. According to legislation approved in parliament on 30 January 2020, the £8,632 threshold at which employees start paying class 1 national insurance contributions (NICs) will increase to £9,500.
Afford Bond Director, Paul Edwards said: The good news is that this £9,500 threshold will also apply to the self-employed who pay Class 2 or Class 4 NICs in 2020/21, reducing their annual bills by £78 – and we know that the NICs threshold is to remain at £50,000, while the main NICs rates will also be unchanged from 6 April.”
“The Government also plans to raise the national insurance threshold to £12,500 in the coming years,” said Paul Edwards, “a move which should put almost £500 a year into people’s pockets.”
Chancellor Sajid Javid said: “We’re determined to do what we promised and put more money into the pockets of ordinary hard-working people. That’s why we’re starting this Government as we mean to go on, by cutting their bills.”
The legislation also confirmed changes to the national insurance thresholds would not affect people’s entitlement to the state pension. If you are self-employed or would like to talk to one of our expert tax advisors or business advisors, please use the Contact Us form on our website www.affordbond.com