The rates and thresholds for NIC were announced in the Autumn Statement. The threshold at which employees start to pay NIC increases from £7,755 to £7,956, and the employer threshold has been set at the same level as that for employees for the first time since 2010/11. The upper earnings limit, at which the rate for employee contributions drops from the full 12% to 2%, rises from £41,450 to £41,865: raising this threshold saves 40% tax, but collects more NIC.
As announced a year ago, a relief for the first £2,000 of employer’s NIC will be introduced for all employers from April 2014, claimed through the first Real Time Information report of the new tax year. The smallest businesses may not have to pay any employer’s NIC, but the effect on larger employers will be negligible.