Sneaky plans afoot for heavy tinkering with NICs?

... a yet further increase in number of valid NI Categories planned for 2024-25

Didn't find your answer?

The first version of the RTI Data Item Guide (for Developers) for 2024-25 has just been published ... with most of the 'schema changes' merely relating to validation updates required to cope with "new tax year and version number" (as usual).

But with no fanfare or indeed any explanation, it also futher increases (again) the range of valid NI Category codes (aka your NI letter) - such that:

* As per https://www.gov.uk/national-insurance-rates-letters/category-letters, 'only' the following letters are currently valid:

+ A or B or C (which almost everyone knows)

+ H (Apprentices under 25)

+ J (Employees who can defer National Insurance because they’re already paying it in another job)

+ M (Employees under 21)

+ Z (Employees under 21 who can defer National Insurance because they’re already paying it in another job)

+ the more recent V (Employees who are working in their first job since leaving the armed forces - aka 'veterans')

And, most recently of all, a further group for employees who work in a Freeport:

+ F or I or L or S (depending on attributes).

.

*However* the latest RTI spec quietly expands this list so as to cover the whole alphabet (apart from O and U which are deemed confusing even though I is allowed - go figure!) ... by adding D and E and K and N (albeit with no explanation of usage).

.

With anyone other than HMRC this might just be pre-emptive housekeeping, but that's not a concept with which they've shown themselves to be acquainted previously - so it suggests that someone close to Hunt has identified a revenue raising opportunity (that isn't literally 'tax raising') via some further tinkering with NI.

In what way remains to be seen, but it would have to be announced in the next Budget to have any chance of associated processes being incorporated in Payroll software before next April (which is what the developer's spec mandates - at least for validation) ... so watch this space?

Replies (8)

Please login or register to join the discussion.

RLI
By lionofludesch
07th Sep 2023 16:54

I'm sure we've had D and E before - can't remember what they were, Contracted out contributions, perhaps.

B must be on the point of withering on the vine by now. You'd have to have had an unbroken marriage for 45 years and still be under 66. Can't be many left by now. And those that do remain would probably be well advised to switch to A.

Thanks (0)
Replying to lionofludesch:
avatar
By Hugo Fair
07th Sep 2023 17:26

Correct re D and E ... and sort of B (although I still encounter quite a few of them).

But I accidentally omitted X (do not have to pay NI);
... and failed to notice, initially, that RTI also already treats G, P, Q, R, T, W and Y as valid (even though I can't for the life of me recall what they're for)?

So, either the mystery deepens or I'm just creating froth out of nothing - who knows (or has a more reliable memory)?

Thanks (1)
avatar
By Richard_Carey
08th Sep 2023 12:09

N, E, K and D are for use with the 'Investment Zone Employer NIC Relief' scheme -

https://www.cipp.org.uk/resources/news/investment-zone-employer-nics-rel...

Thanks (1)
Replying to Richard_Carey:
RLI
By lionofludesch
08th Sep 2023 12:18

Like the Pride folk, we're going to run out of letters soon.

Thanks (2)
Replying to Richard_Carey:
avatar
By Hugo Fair
08th Sep 2023 12:43

Thanks.

So I was (sort of) right, there IS planned further tinkering with the NI system.
Although it's hard to see what is intrinsically different between the proposed Investment Zone Employer NICs Relief and the virtually unused scheme for Freeports.
And the sort of money being creamed off (sorry extracted) from Teeside Freeport absolutely dwarfs any minor saving through NIC schemes (and will no doubt flow into the back-pockets of the usual suspects rather than increasing employment).

Has anyone managed to ascertain rate of uptake of these increasingly pointless schemes (as in done for political rather than pragmatic reasons) ... Veterans, then Freeports (before we embark on Investment Zones and use up all the remaining letters in the alphabet)?

Thanks (1)
Replying to Hugo Fair:
RLI
By lionofludesch
08th Sep 2023 12:52

Hugo Fair wrote:
....... and use up all the remaining letters in the alphabet?

That's my worry.

Thanks (0)
Replying to Hugo Fair:
avatar
By LW64
08th Sep 2023 17:38

'...and the virtually unused scheme for Freeports...'
Possibly also because it can only be applied for a limited number of Freeports.
Freeports are either Customs Freeports or Tax Zones.
The alternative reduced NIC basis only applies in the case of a Tax Zone.

More fanfare than practical application in this case.

Thanks (1)
avatar
By DKB-Sheffield
08th Sep 2023 18:44

Hugo Fair wrote:

(apart from O and U which are deemed confusing even though I is allowed - go figure!)

Maybe...

O is being reserved for 'OLD' when the powers that be start levying NI to those over SPA

And...

U for 'UNDER 16' when NI will be applied from birth in order to cover chimney sweeps and pit hands.

???

Thanks (2)