NIC limits and thresholds for 2020/21 have been announced and draft regulations have been put to Parliament. When passed, they come into effect from 6 April 2020.
The good news is that the Class 1 primary threshold (where your staff start to pay NI) and the Class 4 lower profits limits (where self employed people start to pay NI) will increase significantly – reducing the amount payable.
The upper limits remain unchanged and all other thresholds will see an inflationary increase only.
The above inflation increase in the primary threshold and the lower profits limit is a step towards the government’s ambition to raise these amounts to £12,500 – in line with your personal tax allowance (the amount above which you start paying income tax).
Summary of increases 2019/20 -> 2020/21
LEL £6,136 -> £6,240
Primary Threshold £8,632 -> £9,500
Secondary threshold £8,632 per year -> £8,788 per year
Upper earnings limit remains at £50,000
Weekly amount £3.00 -> £3.05
Small profits threshold £6,365 -> £6,475
LEL £8,632 per year -> £9,500 per year
Upper profits limit remains at £50,000