National Insurance Contributions (Secondary Class 1 Contributions) Act 2025

2025 Chapter 11

An Act to make provision about secondary Class 1 contributions.

Enacted [3rd April 2025]

Be it enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

1 Rate of secondary Class 1 contributions¶

Amends Social Security Contributions and Benefits Act 1992 · 1 change

9 Calculation of secondary Class 1 contributions.

subsection (1) and (1A) unchanged

2 For the purposes of this Act the secondary percentage is ~~13.8%~~15%; but that percentage is subject to alteration under sections 143 and 145 of the Administration Act.

subsections (3) – (4) unchanged

1 In section 9 (2) of the Social Security Contributions and Benefits Act 1992 (rate of secondary Class 1 contributions), for “13.8%” substitute “15%”.

Amends Social Security Contributions and Benefits (Northern Ireland) Act 1992 · 1 change

9 Calculation of secondary Class 1 contributions.

subsection (1) and (1A) unchanged

2 For the purposes of this Act the secondary percentage is ~~13.8%~~15% per cent; but that percentage is subject to alteration under section 129 of the Administration Act.

subsections (3) – (4) unchanged

2 In section 9 (2) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (equivalent provision for Northern Ireland), for “13.8%” substitute “15%”.

3 The amendments made by this section come into force on 6 April 2025.

2 Secondary threshold for secondary Class 1 contributions¶

1 The Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) are amended as follows.

Amends The Social Security (Contributions) Regulations 2001 · 1 change

10 Earnings limits and thresholds

paragraphs (a) – (c) unchanged

d the secondary threshold (for secondary Class 1 contributions) shall be ~~£175~~£96;

paragraphs (e) onwards unchanged

2 In regulation 10 (d) (the secondary threshold for secondary Class 1 contributions), for “£175” substitute “£96”.

Amends The Social Security (Contributions) Regulations 2001 · 2 changes

11 Prescribed equivalents

paragraphs (1) – (3) unchanged

3A Subject to paragraphs (4) and (5), the prescribed equivalents of the secondary threshold shall be—

a where the earnings period is a month, ~~£758~~£417;

b where the earnings period is a year, ~~£9,100~~£5,000;

sub-paragraphs (c) – (e) unchanged

paragraphs (4) – (5) unchanged

3 In regulation 11 (3A) (prescribed equivalents of the secondary threshold)—

a in sub-paragraph (a), for “£758” substitute “£417”, and

b in sub-paragraph (b), for “£9,100” substitute “£5,000”.

4 The amounts substituted by this section are specified for the tax year 2025-26.

3 Increase of employment allowance and removal of £100,000 threshold etc¶

1 The National Insurance Contributions Act 2014 is amended as follows.

Amends National Insurance Contributions Act 2014 · 1 change

1 Employment allowance for national insurance contributions

subsection (1) unchanged

2 The person's employment allowance for the tax year is—

a ~~£5,000~~£10,500, or

b if less, an amount equal to the total amount of the liabilities mentioned in subsection (1)(b) which are not excluded liabilities.

subsections (3) – (8) unchanged

2 In section 1 (2)(a) (the amount of the employment allowance), for “£5,000” substitute “£10,500”.

Amends National Insurance Contributions Act 2014 · 6 deletions

2 Exceptions

subsections (1) – (4A) unchanged

4B . . . [secondary Class 1 liability limit of £100,000 or more]

4C . . .

4D . . .

4E . . .

4F . . .

4G . . .

subsections (5) – (9) unchanged

3 In section 2 (exceptions), omit—

a subsections (4B) to (4G) (secondary Class 1 liability limit of £100,000 or more and receipt of de minimis state aid), and

b the italic heading preceding those subsections.

4 The amendments made by this section come into force on 6 April 2025.

4 Short title¶

This Act may be cited as the National Insurance Contributions (Secondary Class 1 Contributions) Act 2025.