Rates and limits (Table D)

The percentage rates of NIC paid by individuals remain unchanged. There are small decreases in the rates paid by employers who offer their employees a contracted-out pension scheme.

The bands at which the rates change (the Primary Threshold and Upper Earnings Limit) increase this year in line with inflation. In April 2008 there will be a substantial increase in the UEL and from April 2009 it will be aligned with the 40% threshold for income tax. This represents a tax increase because more earnings will be charged to NIC at the higher rates (9.4% or 11% for employees, 8% for self-employed) and less at 1%.