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National Insurance Contributions Act 2008

Type of Bill:
Government Bill
Alistair Darling
HM Treasury
Lord McKenzie of Luton
Department for Work and Pensions

Progress of the Bill

Bill started in the House of Commons

  1. House of Commons
    1. 1st reading
    2. 2nd reading
    3. Committee stage
    4. Report stage
    5. 3rd reading
  2. House of Lords
    1. 1st reading
    2. 2nd reading
    3. Committee stage
    4. Report stage
    5. 3rd reading
  3. Consideration of Amendments
  4. Royal Assent

Act of Parliament

House Act Date
National Insurance Contributions Act 2008 c.16 - html version 29.07.2008

Summary of the National Insurance Contributions Act 2008

In his Budget speech on 21 March 2007 the then Chancellor of the Exchequer, Gordon Brown, announced a series of changes to the personal tax system.

One of these measures was to ‘align the income tax system with the national insurance system’ from April 2009, ‘thereby creating a tax system for income that has just two rates and two thresholds.’

Key areas

  • The Bill proposes to align the upper earnings limit (UEL) for National Insurance contributions (NICs) with the higher rate threshold – the point at which taxpayers start to pay the higher rate of income tax – from 6 April 2009.  At present the upper earnings limit is subject to a statutory limit, so that it must be set at between six and a half and seven and a half times the primary threshold for National Insurance contributions. The Bill removes this restriction, and allows the limit to be set by secondary legislation for 2009-10 and beyond.
  • It introduces an upper accrual point (UAP) for the state second pension (S2P), also from 6 April 2009. The Pensions Act 2007 contains a number of provisions to gradually amend the S2P into a flat-rate top-up to the basic state pension, including the introduction of the upper accrual point. It had been intended that this would be introduced in 2012. The Bill brings this forward to April 2009, so that increases in the upper earnings limit from this date do not boost the S2P that higher earners would accrue.

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