EMPLOYMENT ISSUES
National Insurance Contributions (NICs)
The detailed NIC rates, earnings limits and thresholds
proposed for 2006/07 are set out below. The thresholds have been increased but
the rates of Class 1 and 4 contributions have been held at their existing
levels.
National Insurance rates |
|
|
2006/07 |
2005/06 |
|
Employees’ threshold
|
£97 pw |
£94 pw |
|
Employers’ threshold
|
£97 pw |
£94 pw |
|
Upper earnings limit –
employees only |
£645 pw |
£630 pw |
|
Employees’ Class 1 rate on
earnings between threshold and upper earnings limit |
11% |
11% |
|
Employees’ Class 1 rate on
earnings above upper earnings limit |
1% |
1% |
|
Employers’ Class 1 rate on
earnings above threshold |
12.8% |
12.8% |
|
Class 2 – self-employed flat
rate |
£2.10 pw |
£2.10 pw |
|
Class 2 – small earnings
exception |
£4,465 pa |
£4,345 pa |
|
Lower profits limit (for
self-employed Class 4 contribution) |
£5,035 |
£4,895 |
|
Upper profits limit |
£33,540 |
£32,760 |
|
Class 4 rate on profits between
lower and upper profits limit |
8% |
8% |
|
Class 4 rate on profits above upper
profits limit |
1% |
1% |
|
Class 3 – voluntary |
£7.55 pw |
£7.35 pw |
Note
Although employees’ NICs only become payable
once earnings exceed £97 per week, any earnings between £84 and
£97 per week in 2006/07 will protect an entitlement to basic state
retirement benefits without incurring a liability to NIC.
National Employer Training Programme
The National Employer Training Programme will build on
the Employer Training Pilots. It is designed to give employers the opportunity
to access free and flexibly delivered training for their low-skilled employees.
The national programme Train to Gain will be rolled out from 2006/07.
To help businesses with fewer than 50 employees, wages compensation paid to
employers, for the time low-skilled employees take off to train, will continue
to be made available in 2006/07 and 2007/08.
|
