Class 1 Structural Overview from 6 April 2003: Structural changes: Married women and widows reduced rate NICs
NIM01106 explains the changes to the structure of Class 1 NICs from 6 April 2003 provided by new section 8, SSCBA 1992 and introduced as part of the National Insurance Contributions Act 2002.
Section 8(3) SSCBA 92 provides that primary Class 1 NICs are subject to alteration for special cases. One of those special cases is married women and widows.
NIM30000 onwards provides detailed guidance on the liability for Class 1 NICs for certain married women and widows.
The National Insurance Contributions Act 2002 amended section 19(4)(a) of SSCBA 92 which provides for a reduced rate of Class 1 NICs to be paid by certain married women and widows. The amendment restricts the reduction available by providing for it to operate only on Class 1 contributions payable at the main primary percentage.
This means that those married women and widows with entitlement to pay reduced rate Class 1 NICs will pay:
- a reduced main primary percentage on so much of their earnings paid in a tax week in respect of their employment as
- exceeds the Primary Threshold (or the prescribed equivalent) but
- does not exceed the current Upper Earnings Limit (or the prescribed equivalent) and
- the additional primary percentage on so much of the earner’s earnings as exceeds the Upper Earnings Limit (or the prescribed equivalent)
For the tax year beginning 6th April 2003 onwards:
- the main primary percentage for employees with a valid reduced rate election is 4.85% and
- the additional primary percentage is 1%
Note that the married women’s reduced rate can never apply to the additional primary percentage.