Employers

News: March 2012

Employers

NI

For 2012/13 the main rates and thresholds for NI contributions are:

  • Lower Earnings Limit (LEL) for Class 1 NICs – £107/week
  • Employer’s class 1 above £144/week not contracted out – 13.8%
  • Employee’s class 1 not contracted out from £146 to £817/week – 12%
  • Employee’s additional class 1 above £817/week – 2%
  • Self-employed class 4 from £7,605 to £42,475 per annum – 9%
  • Self-employed class 4 additional rate above £42,475 per annum – 2%
  • Self-employed class 2 – £2.65 per week
  • Voluntary contributions class 3 – £13.25 per week

The Government is consulting on how to integrate the administration of income tax and NI for employers and the self-employed. Any changes are unlikely to take effect until 2014 or later.

Share Schemes

The Government wants to encourage more employees to acquire shares in the companies that employ them. Small and medium sized companies can use the Enterprise Management Incentive share option scheme (EMI) to grant share options to employees, but there is a £120,000 cap on the value of share options each employee can acquire. The Government plans to raise this cap to £250,000 as soon as possible.

Cars and Car Fuel
Car Benefit

The tax charge for the private use of a company car is based on a percentage of the list price of that car when new, the percentage being based on the vehicle’s CO2 emissions.

From 6 April 2012 cars with CO2 emissions in the band 76-99g/km will be taxed at 10% of list price. Those with CO2 emissions of 100g/km will be taxed at 11% of list price, with the percentage increasing in 1% steps for each additional 5g/km. From 6 April 2013 the 10% list price band will reduce again to 76-94g/km. A car with CO2 emissions of just 115g/km will then be taxed at 15% of list price.

From 6 April 2014 the 11% of list price will apply to cars with CO2 emissions in the band 76-94g/km, with a 1% step up for every addition 5g/km of CO2. From 6 April 2015 the minimum percentage of list price will be 13%, and from 2016 the minimum percentage of list price increases to 15%.

Fuel Benefit

Where a company car driver receives free fuel, the taxable benefit is calculated as the percentage of the list price for the car applied to a set value, currently £18,800. This will rise to £20,200 from 6 April 2012. The maximum taxable benefit of receiving free road fuel for private use will increase from £6,580 (for 2011/12) to £7,070.

The taxable benefit when fuel is provided for private use in a company van is frozen at £550 for 2012/13.