The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
There are three classes of NIC relevant to employment income: Class 1, Class 1A and Class 1B.
A primary Class 1 liability arises on employees unless they are:
under the age of 16 when the payment is made
employees of certain overseas organisations
over the age of state retirement age (see the Retirement age guidance note)
A secondary liability to Class 1 NIC arises on the employer even in the case of employees over retirement age as the employer’s liability continues even though the employee ceases to be liable to NIC at this point.
Class 1 NIC is payable on an employee’s earnings. There are two types of Class 1 liability: primary Class 1 NIC liability payable by the employee (sometimes known as ‘employee’s contributions’) and secondary Class 1 NIC liability payable by the employer (sometimes known as ‘employer’s contributions’).
Certain payments are disregarded for the purposes of Class 1 NIC. These include:
the reimbursement of expenses
payments in kind
the provision of services or other facilities
board and lodging provided to employees
But there may still be an NIC charge in respect of such items ― see Classes 1A and 1B below.
The calculation of Class 1 NIC is worked out by reference to earnings periods (see the NIC earnings periods guidance note). For each earnings period, the employer has to compare the level of earnings against a number of thresholds and limits. The Government had set out a range of proposed tax changes in its 2019 election manifesto to increase the NIC threshold to £9,500 from April 2020 which was a much more significant increase than in previous years. See the Tax
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionConsortium relief enables losses of a consortium company to be transferred to consortium members in proportion to the consortium member’s interest in the consortium company, and vice versa. Consortium relief is a flexible relief which is available in several different scenarios which are
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeUK withholding tax may be reduced under the provisions of a double tax treaty (DTT). Prior to 1 June 2021, payments of interest and royalties made to EU resident associated companies were also exempt from
Working rule agreements are used in the construction industry and similar areas. They are national agreements made between trade unions and employers across the country, setting out the terms and conditions that apply to particular categories of hourly paid manual workers. The workers concerned are
Usually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note for further details.This rule can be