Tyas & Company
Chartered Accountants, Registered Auditors, Tax, Business Advisors
Friday, 07 February 2020 00:01

Changes to NIC from April 2020

The Chancellor, Sajid Javid, has confirmed that a Conservative manifesto promise to increase the National Insurance contributions (NIC) thresholds to £9,500 will apply from April 2020. The increase, by more than 10% over the current year’s figure of £8,632, will apply to both the employed and self-employed.

Some 31 million taxpayers will benefit from this change with a typical employee saving around £104 and a self-employed person £78 in 2020-21.

All other thresholds for 2020/21 will rise with inflation, except for the upper NIC thresholds which will remain frozen at £50,000. These measures were announced in the 2018 Autumn Budget.

Announcing the cuts, the Chancellor said:

'We’re determined to do what we promised and put more money into the pockets of ordinary hard-working people. That’s why we’re starting this Government as we mean to go on, by cutting their bills.

We want everyone to feel that they can contribute to the new chapter we are opening for the economy and our country, because under this Government work will always pay.'

The Government has also confirmed that the threshold changes will not affect low earners’ entitlement to contributory benefits such as the State Pension, with the Lower Earnings Limit and Small Profits Threshold. The working age benefits will also be up-rated in line with inflation from April 2020 ending the freeze on these benefits that has been in place since 2016.

 

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