Change in NI Rates

[dayglo]

I only earn about £25k a year, what do the new NI rates and thresholds mean for me- should I put another £5k into a pension to reduce earnings and therefore my NI liabilities) Can anyone out there help give me some advice?

[The SMG]

Originally Posted by dayglo

I only earn about £25k a year, what do the new NI rates and thresholds mean for me- should I put another £5k into a pension to reduce earnings and therefore my NI liabilities) Can anyone out there help give me some advice?

Hi Dayglo,

Can you tell us a bit more about your situation - do you have your own limited company or are you working PAYE or through an umbrella company?

G

[Ray Coman]

Originally Posted by dayglo

I only earn about £25k a year, what do the new NI rates and thresholds mean for me- should I put another £5k into a pension to reduce earnings and therefore my NI liabilities) Can anyone out there help give me some advice?

The government made two changes in the recent pre-budget report, one of which is to raise the National Insurance rate by 1%, the other is to raise the threshold at which you start paying national insurance by £570. The effect of these changes together is that you are no better or worse off if you earnings are around £20,000. There is no sudden leap in NI around £20,000. Neither of these changes take effect until the 6 April 2011. Where possible, you are better off delaying expenditure until 6 April 2011, so that you get more national insurance relief on the expense.