National Insurance Changes for Employers?

national-insurance-changes legal blog banner

If you are an employer who employs individuals between the ages of 16 and 21, new changes coming into force from 6 April 2015 mean that you will no longer have to pay Class 1 National Insurance contributions.

This applies to all earnings up to the ‘Upper Secondary Threshold’ for these employees.

Employers will need to choose 1 of the 7 new National Insurance categories for the employees. From this date it will be solely the employer’s responsibility to ensure that the correct letter has been applied to the employee based on their age and circumstances.

The 7 categories that employers can choose from are:

  • M – not contracted-out standard rate contributions
  • Z – not contracted-out deferred rate contributions
  • Y – mariners not contracted-out standard rate contributions
  • P – mariners not contracted-out deferred rate contributions
  • V – mariners contracted-out salary related contributions
  • I – contracted-out salary related standard rate contributions
  • K – contracted-out salary related deferred rate contributions

However, employees will still need to pay the standard rate of primary Class 1 National Insurance contributions. The national insurance changes are for the benefit of employers, who will have to pay less National Insurance.

If you employ individuals between the ages of 16-21 and are unsure of how this will affect you,  visit our offices today at Windsor Crown House, 7 Windsor Road, Slough, SL1 2DX – or give us a call on 01753 486 777 to speak to a member of our experienced employment team.