It had already been announced that there would be a half percent increase in National Insurance Contributions (NIC) from next April. Today’s Pre-Budget Report has announced that there will be a further half percent increase from April 2011. This means that from April 2011 the main rate for employees will be 12% and for the self-employed will be 9%. The rate of employer contributions will be 13.8%.

To compensate lower earners the starting threshold will be raised by £570.

Costs are going up more steeply than otherwise expected from April 2011.  The rates for the self-employed, employees and employers will all rise by 1% (previously expected to be at 0.5%).  This will mean an effective highest rate of tax of 52%

Barry Hallam is a senior manager at Mercer & Hole. If you would like to discuss the contents of this post with Barry you can call him on 020 7353 1597. 

• Email This
• Print
• Comments
• Share Link
• Mercer Hole Homepage
• Contact Us