NICs

The Social Security (Contributions) (Re-rating) Order 2009 (SI 2009/593) comes into force on 6 April 2009.

This Order increases the rates of Class 2 and Class 3 national insurance contributions (NICs) from 6 April 2009. The weekly rate for Class 2 NIC increases from £2.30 to £2.40, and Class 3 contributions will increase from £8.10 to £12.05 per week.

The Order also increases the lower earnings exemption threshold for Class 2 NICs from £4,825 to £5,075 from 6 April 2009. This is the limit below which no Class 2 contributions are payable.

In addition, the Order also increases, from £5,435 to £5,715 and from £40,040 to £43,875 respectively, the lower and upper profit limits between which Class 4 contributions are payable at the main Class 4 percentage rate (8 per cent for 2008-09).

The Social Security (Contributions) (Amendment No. 2) Regulations 2009 (SI 2009/591) also come into force on 6 April 2009.

These regulations specify the lower and upper earnings limits for primary Class 1 contributions, and the primary and secondary thresholds for Class 1 NICs for the tax year beginning 6 April 2009.

From 6 April 2009:

• the lower earnings limit will increase from £90 per week to £95 per week;
• the upper earnings limit will increase from £770 per week to £844 per week; and
• the primary and secondary thresholds for Class 1 NICs will increase from £105 to £110 per week.