Pre-budget report NI changes query

martyp

Hi all,
I'd like to think I've found something positive in the pre-budget report but was wondering if someone could tell me if I've understood it correctly.
It says that there'll be a 0.5% increase but people on less than £20k won't pay NI?

I am a weekly paid contractor and I think my earnings total less than £20k and generally out of my weekly pay comes:
Approx £14 Employer's NI
Approx £8 Employee's NI

Am I right in thinking (and hoping) that both of those would cease to be paid next year if I earn less than £20k?
I thought that might be nice considering there's no increase in the tax free allowance.

Many thanks

chalkie99

Don't think that is right, sorry!

He actually said that anyone earning less than 20k would not pay any extra - not that they would not pay any at all.

martyp

Thought it seemed to good to be true! Thanks for clearing that one up chalkie99

Mikeyorks

It's just restricting the increase to those above £20k. Extract from Treasury Press Release :-

To ensure that the lowest earners are protected from the rise in NICs rates, the level at which people start to pay NICs will increase in April 2011 by £570 above the level previously announced. Those paying the standard employee rate and earning under £20,000 will pay less NICs overall as result of these changes.