NIC Changes for Under 21s

By September 25, 2014Uncategorized

One of the announcements in the Autumn Statement 2013 concerned youth unemployment. Employers will no longer need to pay Class 1 secondary National Insurance contributions for employees below the age of 21.

This will come into force from 6th April 2015 and covers earnings up to the upper earnings limit (UEL). The government aims to encourage employers to employ individuals under the age of 21, as part of their policies to tackle youth unemployment. The UEL is anticipated to be £813 per week from April 2015.

The method will be via a new NIC letter, applied to employees below the age of 21. The government has anticipated some additional costs to business in implementing the changes, but the aim is to be overall positive for business, with a reduction in employer National Insurance contributions. There is no direct benefit to the employee but the government hopes to raise employment levels for this group.

This change should be positive for our clients, and although there may be some additional paper to be moved around, it is our systems that will deal with the new coding and the administration.

For further information you can visit here – https://www.gov.uk/government/publications/abolition-of-employers-national-insurance-contributions-for-the-under-21s