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HMRC internal manual

National Insurance Manual

Class 1 Structural Overview from 6 April 2003: Structural changes: The Class 1 and 2 annual maximum: Married women and widows with reduced rate elections

Regulation 21(3) SS(C)R 2001

NIM01163 explains the calculation of the Class 1 and 2 annual maximum for employeeswho have more than one employment.

The calculation provides an annual maximum for all contributors who have more than oneemployment but it does not take account of those employees who, because they hold a validreduced rate election, will pay main primary contributions at a reduced main rate.

To ensure that these contributors are catered for, regulation 21(3) provides that for thepurposes of determining a contributor’s liability under the maximum calculation, aperson who pays an amount of primary Class 1 NICs at a rate of less than 11% because theyhold a valid reduced rate election shall be treated as having paid contributions at 11%.