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National insurance anomaly 2021/22

The national insurance Class 1 annual secondary threshold is not as I expected on the HMRC website

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I have been checking what salary my company directors will pay themselves for 2021/22 using the HMRC website on Rates and thresholds for employers 2021 to 2022 - GOV.UK (www.gov.uk)

The national insurance secondary threshold is to be £737 per month or £8,840 per year.  As £737 times 12 exceeds £8,840 (it’s actually £8,844 so is £4 more, rather than less as I expected). One of my clients has suggested that to be sure to keep under the threshold he should only take £736 per month.  Checking back a few years it seems that habitually the annual threshold is £4 more than the sum of the 12 monthly figures.  This seems logical so that if the individual receives some pence more than £732 in 2020/21 it won’t exceed the annual figure of £8,788 by month 12.  Is the £8,840 a misprint on the website – should it read £8,848?

 

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RLI
By lionofludesch
12th Mar 2021 13:15

It often happens. Whenever the weekly limit doesn't divide by 3, in fact.

The NI limits are set by weeks. The monthly limit is set as 52/12 of the weekly limit, rounded to the nearest pound.

It's up to your client to go for £736 if he objects to paying a few pence a month in NI. Purely his decision but not worth spending your time in discussion. £736 or £737.

Whatever.

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By akr129
22nd Mar 2021 13:08

Thanks that's very helpful. It's not that my sole directors object to paying trivial amounts of NI, it's the inconvenience of having to organise to do the small remittances that is to be avoided.

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RLI
By lionofludesch
22nd Mar 2021 13:21

akr129 wrote:

Thanks that's very helpful. It's not that my sole directors object to paying trivial amounts of NI, it's the inconvenience of having to organise to do the small remittances that is to be avoided.

I take your point but I suspect that, if they're not paid, nobody will come knocking on the door for the debt.

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By Matrix
12th Mar 2021 13:37

Thanks for pointing this out. I may keep everyone on £732.

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