As per the changes to the budget in 2019, national insurance is changing. There are things that business owners need to be aware of for their own national insurance, but also for the national insurance of those they employ on a part time or full time basis.
National Insurance rules are that if you are over the age of 16 years old and earn £8,424 or more then you must pay national insurance. This also goes for those that receive national state pension and those receiving some benefits too.
National Insurance Currently
National insurance as it currently stands is as follows;
· Those earning up to £8,424 pay no national insurance
· Those earning between £8,424 and £46,834 pay 12% national insurance on this portion of their income
· Those earning £46,834 or more will pay 2% national insurance on this portion of their income
National Insurance as of April 2019
The national insurance thresholds will be raised as of 1st April 2019. These national insurance thresholds are shown below;
· Those earning £8632 or less will pay no national insurance
· Those earning between £8,632 and £50,024 will pay 12% national insurance on this portion of their income
· Those earning £50.024 or more will pay 2% national insurance on this portion of their income
What Do the April 2019 National Insurance Changes Mean?
As you can see the national insurance thresholds have changed, but what does that actually mean and how will it affect you and your employees?
· Tax payers will pay an extra 10% of their earnings between £46,834 and £50,024 on their national insurance from April 2019. If you or your employee earns £50,024 for example, no national insurance contributions will be made for the first £8,632. However 12% of wages between £8,632 and £50,024 will be made to national insurance. In this example, you or your employee would be paying £294 more tax from when April 2019, which compared to pre-April 2019 changes.
If you have concerns about your own national insurance or national insurance changes for your employees then please contact us directly.
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