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National insurance contributions (NIC)

Class 1 (Employees)
Not Contracted out of State Second Pension S2P
2006/07 2005/06
Employee Employee

No NICs where earnings are up to
£97 a week
11% NICs on £97.01-£645 a week
1% NICs over £645 a week

No NICs where earnings are up to
£94 a week
11% NICs on £94.01-£630 a week
1% NICs over £630 a week
Employer Employer

No NICs on the first £97 a week
12.8% NICs over £97 a week

No NICs on the first £94 a week
12.8% NICs over £94 a week

Earnings limit or threshold 2006/07 2005/06
  Weekly Monthly Annual Weekly Monthly Annual
£ £ £ £ £ £
Lower limit (LEL) 84 364 4,368 82 356 4,264
NICs start 97 420 5,035 94 408 4,895
Upper limit (UEL) 645 2,795 33,540 630 2,730 32,760
Contracted-out S2P rebate 2006/07 2005/06
Reduction on band earnings £84.01-£645 pw £82.01-£630 pw
Employer rate reduction    
  • Salary-related scheme
 3.5% 3.5%
  • Money-purchase scheme
 1.0% 1.0%
Employee rate reduction 1.6% 1.6%
Class 1A (Employers)    
Most taxable employee benefits 12.8% 12.8%
     
Class 2 (Self-Employed) 2006/07 2005/06
Flat rate £2.10 pw £109.20 pa £2.10 pw £109.20 pa
If earnings over £4,465 pa £4,345 pa
Class 4 (Self-Employed) 2006/07 2005/06
On profits £5,035-£33,540 pa   8% £4,895-£32,760 pa   8%
  Over £33,540 pa       1% Over £32,760 pa        1%
Class 3 (Voluntary) 2006/07 2005/06
Flat rate £7.55pw £392.60 pa £7.35pw £382.20 pa

 
Contents
Summary
Personal and trust taxation
Pensions and employment taxation
Business taxes
Capital taxes
VAT     
Tax avoidance    
National insurance contributions

This summary has been prepared very rapidly and is for general information only. The proposals are in any event subject to amendment before the Finance Act is passed. You are recommended to seek competent professional advice before taking any action on the basis of the contents of this publication.
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