Employers no longer have to pay Class 1 National Insurance contributions for 21- year- olds on earnings up to the upper secondary threshold, expert Stuart Haigh warned this week.
He said: “The changes are causing some confusion amongst employers and I suggest they take advice on this matter. The zero rate does not apply to certain National Insurance classes and there are some new categories.”
Stuart, a director at Whitley Stimpson, the largest independent accountants and business advisers in the area with offices in Bicester, Banbury and High Wycombe, added: “Some of the changes to those categories continue into next year.
“The introduction of the under 21 secondary rate coincides with the penultimate year of contracting out before the new state pension is implemented, which causes further changes for employers.
“However, employers should tell employees that they will have to continue to pay Class 1 NICs through their salary. It is employers who benefit from this change. Employee’s entitlement to contributory social security benefits, including the state pension, will not be affected.”
Employers can contact Stuart Haigh on 01869 252152 or email firstname.lastname@example.org