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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 1 structural overview: earnings brackets

From 6 October 1985 a number of earnings bands with lower Class 1 NIC percentage rates were introduced for employers and low paid employees. The amount of Class 1 NICs payable was dependent upon the earnings band into which the earnings fell. These earnings bands were called earnings brackets. From October 1989 earnings brackets ceased to exist for primary (see NIM01001) NICs but they continued for secondary (see NIM01001) NICs until 6 April 1999. NIM11005 et seq provides details of the Earnings Brackets for 1996/1997 onwards.

From 6 April 1999 to 5 April 2003 a single primary percentage rate applied and a single secondary percentage rate applied.

A major change to the structure of primary Class 1 NICs was introduced from 6 April 2003, providing for two primary percentage rates, although a single secondary percentage rate was maintained. Guidance on these changes can be found at NIM01100 onwards.

Further changes to the structure of primary Class 1 NICs were introduced from 6 April 2009. Guidance on these changes can be found at NIM01200 onwards.