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Winters Chartered Accountants and Registered Auditors
29 Ludgate Hill
London EC4M 7JE
England, UK
Tel:
+44 (0) 20 7919 9100
Fax:
+44 (0)
20 7919 9019
e-mail:
info@winters.co.uk
Previous Budget Updates:
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WINTERS BUDGET NEWS and UPDATES
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2005 PRE-BUDGET REPORT SUMMARY
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.
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National
Insurance rates
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2006/07
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2005/06
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Employees’
threshold
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£97
pw
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£94
pw
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Employers’
threshold
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£97
pw
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£94
pw
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Upper
earnings limit – employees only
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£645
pw
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£630
pw
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Employees’
Class 1 rate on earnings between threshold and upper
earnings limit
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11%
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11%
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Employees’
Class 1 rate on earnings above upper earnings limit
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1%
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1%
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Employers’
Class 1 rate on earnings above threshold
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12.8%
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12.8%
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Class
2 – self-employed flat rate
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£2.10
pw
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£2.10
pw
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Class
2 – small earnings exception
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£4,465
pa
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£4,345
pa
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Lower
profits limit (for self-employed Class 4
contribution)
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£5,035
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£4,895
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Upper
profits limit
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£33,540
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£32,760
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Class
4 rate on profits between lower and upper profits
limit
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8%
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8%
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Class
4 rate on profits above upper profits limit
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1%
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1%
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Class
3 – voluntary
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£7.55
pw
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£7.35
pw
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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.
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Disclaimer - for information of users
This summary is published for the information of clients. It provides only an overview of the Pre-Budget Report, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.
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