nics Archives - WRLO Accountants

Employer NICs rise may have unforeseen consequences

WRLO Accountants — Fri, 08 Nov 2024 10:57:03 +0000

The extra costs of the increase in employers’ NICs could cause businesses to respond in ways the government did not intend, the Chartered Institute of Taxation (CIOT) has warned. At the Autumn Budget, Chancellor Rachel Reeves announced an increase to the rate of employer NICs by 1.2 percentage points, to 15% from 6 April 2025. The CIOT says that the increase extends the differential in the burden of tax and NICs borne by those in employment compared to those engaged as self-employed. The higher employers’ NICs goes, the greater the likelihood employers may seek ways to mitigate or absorb the burden, which could include potential alternative arrangements to taking on people as employees, adds the CIOT. Alternatives could include outsourcing or offshoring services and reducing the numbers of employees. Eleanor Meredith, Chair of CIOT’s Employment Taxes Committee, said: ‘While employers must pay employer NICs on their employees’ earnings, no employer NICs is due where someone is genuinely self-employed. ‘We are concerned that the increase in employers’ NICs could lead to an increase in ‘false self-employment’, where businesses trying to save money turn to arrangements where the worker is not directly employed by them, without necessarily appreciating the rules and risks […]

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Chancellor promises to drive growth and raises £40 billion in taxes

WRLO Accountants — Sat, 02 Nov 2024 16:07:31 +0000

Chancellor Rachel Reeves pledged to ‘invest, invest, invest’ to drive growth and ‘restore economic stability’ in the Autumn Budget. The Budget, which was Labour’s first in over 14 years and the first ever delivered by a female Chancellor, saw £40 billion in tax announcements. Ms Reeves repeated her claims that the government had inherited a £22 billion ‘black hole’ in the public finances from the Conservatives. Pre-Budget speculation had centred on the likelihood of increases to employers’ National Insurance contributions (NICs), Capital Gains Tax (CGT) and Inheritance Tax (IHT). The Chancellor announced an increase to the rate of employer NICs by 1.2 percentage points to 15% from 6 April 2025. However, the Secondary Threshold – the level at which employers become liable to pay NICs on each employee’s salary – will reduce from £9,100 per year to £5,000 per year. CGT on non-residential assets will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate for disposals from 30 October 2024. These new rates will match the residential property rates. The CGT rates applicable to assets qualifying for Business Asset Disposal Relief (BADR) and Investors’ Relief will remain at […]

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10,000 boost State Pension with online payments

WRLO Accountants — Tue, 22 Oct 2024 16:12:30 +0000

More than 10,000 payments worth £12.5 million have been made through a new digital service to boost people’s state pension, HMRC has revealed. People have until 5 April 2025 to maximise their state pension by making voluntary National Insurance contributions (NICs) to fill any gaps in their NICs record between 6 April 2006 and 5 April 2018. The service enables people to check if they have gaps in their NICs record, calculate if making a payment would increase their state pension, and then make a payment if they wish to do so. HMRC data shows: 51% of taxpayers topped up one year of their NICs record the average online payment is £1,193 the largest weekly State Pension increase is £107.44. After the 5 April 2025 deadline, people will only be able to make voluntary contributions for the previous six tax years, in line with normal time limits. Emma Reynolds, Minister for Pensions, said: ‘We want pensioners of today and tomorrow to enjoy the dignity and support they deserve in retirement. That’s why I urge everyone to check if they could benefit by filling gaps before the deadline passes. Using our online tool means only a few clicks could make a […]

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