David Cutter Chartered Accountants

Tax Facts

Summer Budget 2010

National Insurance Contributions

Class 1 (Employees)
	Contracted In	Contracted Out
		Salary Related	Money Purchase
Employee contributions
- on earnings between £110.01 - £770pw	11.0%	9.4%	9.4%
- on earnings between £770.01 - £844pw	11.0%	11.0%	11.0%
- on earnings above £844pw	1.0%	1.0%	1.0%
Employer contributions
- on earnings between £110.01 and £770pw	12.8%	9.1%	11.4%
- on earnings above £770pw	12.8%	12.8%	12.8%
Employer contributions (at 12.8%) are also due on most benefits in kind and on tax paid on an employee's behalf under a PAYE settlement agreement.

Class 2 (Self-employed)
Flat rate per week			£2.40
Small earnings exception: profits per annum			£5,075

Class 3 (Voluntary)
Flat rate per week			£12.05

Class 4 (Self-employed)
On profits £5,715 - £43,875			8.0%
On profits over £43,875			1.0%
From September 2010, there will be a "holiday" from employee's NIC for new businesses employing up to 10 new employees in their first year. The maximum benefit is £5000 per employee. Businesses in certain areas, such as London and the SE, are excluded.

2 Lyttleton Court | Birmingham Street | Halesowen | West Midlands | B63 3HN

DAVID CUTTER & CO IS A TRADING NAME OF CUTTER & CO LIMITED

COMPANY NUMBER: 07252989

A MEMBER OF THE INSTITUTE OF CHARTERED ACCOUNTANTS IN ENGLAND AND WALES