From 6 April 2009, changes have been made to how employers will have to record National Insurance Contributions (NICs) due to changes to the State Second Pension. Employers will have to record NICs in the following four earnings bands, with the introduction of the Upper Accrual Point:
- earnings up to and including the Lower Earnings Level (LEL), where earnings are equal to or exceed the LEL
- earnings above the LEL up to and including the Earnings Threshold (ET)
- earnings above the ET up to and including the Upper Accrual Point (UAP)
- earnings above the UAP up to and including the Upper Earnings Limit (UEL).
HMRC’s P11 Calculator on their CD-ROM has been updated to include all four earnings bands shown above.
It may be worth checking that, if you use payroll software, your provider has made these NICs changes available as part of the annual upgrade.
HMRC’s paper form P11 Deductions Working Sheets have been updated. The 2009/10 version can be obtained from the Employer Orderline. Old stocks of P11 sheets should be destroyed. Further help on completing the 2009/10 P11 can be found in the Employer Helpbook E11 Starting the Tax Year.
Source: HMRC employer bulletin