As of 6th April 2015 employers with employees aged under 21 years will no longer pay class 1 secondary national insurance in respect of those employees provided the earnings are below the upper earnings limit of £815 per week. The change in legislation was part of the Autumn statement of 2013 and is designed to encourage employers to employ youth, a sector of society that has been significantly affected by the recession that began in 2007.
Currently class 1 secondary national insurance would be payable by the employer at the rate of 13.8% above £156 per week and this will be the case for those over 21.
In practical terms it means that those businesses running their own payroll systems or tax advisers running payroll systems on behalf of clients must ensure that they identify employees under the age of 21 and apply the correct NI category letter to avoid paying too much National Insurance.
If you need any advice on Payroll Services or Taxation then please contact Park Lane Accountants on 01249 247160. We support entrepreneurs in Chippenham, Bath and the surrounding Wiltshire towns and villages and are friendly and approachable.