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HMRC internal manual

National Insurance Manual

Class 1B NICs: liability: calculation: general

They are payable on

  • the value of all items covered by the PSA which would normally give rise to a Class 1 or Class 1A liability
  • the total amount of tax payable by the employer under the PSA.

Class 1B NICs will be due on the total tax payable under the PSA regardless of whether the PSA includes any items which would normally be liable for Class 1 or Class 1A NICs.

The table below shows the appropriate Class 1B rate for PSAs entered into for the years identified.

Year for which PSA agreed Class 1B NICs percentage rate
1999/2000 12.2%
2000/2001 12.2%
2001/2002 11.9%
2002/2003 11.8%
2003/2004 12.8%
2004/2005 12.8%

See NIM18080 for an example of how to calculate Class 1B NICs.