The Chancellor announced an increase in the primary threshold and lower profit limit for national insurance (NI) to £9,500 in April 2020.
This measure will increase the primary threshold for employees and the lower profits limit for the self-employed. The secondary threshold has a smaller increase to £8,788. This increase is expected to save a typical employee around £104 per year and a self-employed person around £78 per year in 2020/21. In addition, around 1.1 million people will be taken out of paying Class 1 and Class 4 NIC entirely. This is the first step in the government’s aim to increase this threshold to £12,500.
It was also announced that employers of veterans will be able to claim a ‘holiday’ rate of 0% Class 1 secondary NI when employing veterans who have left regular service. This holiday rate lasts for one year from the date of commencement of the eligible veterans first civilian employment. This comes into effect from April 2021.