SI 2021/157 – The Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2021

Released 15 February 2021

SI 2020/157 sets National Insurance Contributions rates, limits and threshold amounts from 6 April 2021.

The Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2021 amend the Social Security Contributions and Benefits Act 1992 and corresponding provisions in the Social Security Contributions and Benefits (Northern Ireland) Act 1992, and the Social Security (Contributions) Regulations 2001 (SI 2001/1004). The amendments:

increase the small profits threshold (SSCBA 1992, s. 11(4)) from £6,475 per year to £6,515 per year;

increase the amount of voluntary Class 3 NICs (SSCBA 1992, s. 13(1)) from £15.30 to £15.40;

increase the lower and upper profits limits for Class 4 NICs (SSCBA 1992, s. 15 and 18) from £9,500 per year to £9,568 (lower limit) and from £50,000 per year to £50,270 (upper limit);

increase or maintain at the same level (as the case may be) a number of weekly earnings limits and thresholds for determining liability to Class 1 NICs and entitlement to associated state benefits (SI 2001/1004, reg. 10):

(i)the lower earnings limit remains at £120;

(ii)the upper earnings limit increases from £962 to £967;

(iii)the primary threshold increases from £183 to £184;

(iv)the secondary threshold increases from £169 to £170;

(v)the upper secondary threshold for the Under 21 age group increases from £962 to £967; and

(vi)the upper secondary threshold for relevant apprentices increases from £962 to £967.

The regulations further increase the prescribed equivalents of the primary threshold, the secondary threshold, the upper earnings limit and the upper secondary thresholds for the Under 21 age group and relevant apprentices (SI 2001/1004, reg. 11) for monthly and yearly earnings periods (the prescribed equivalents of the lower earnings limit remain the same) and provides for the Social Security Act 1993, s. 2(2) to have effect for the tax year 2021–2022. This allows money provided by Parliament to be paid into the National Insurance Fund up to a limit of 17 per cent of the estimated benefit expenditure for the financial year ending with 31 March 2022 (and corresponding provision is made for Northern Ireland). The regulations come into force on 6 April 2021.

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