Class 1 contributions
48.—(1) For subsection (1) of section 5 of the Contributions and Benefits Act (earnings limits for Class 1 contributions) there shall be substituted the following subsection—
“(1) For the purposes of this Act there shall for every tax year be—
(a)a lower earnings limit (for primary Class 1 contributions);
(b)an upper earnings limit (for primary Class 1 contributions); and
(c)an earnings threshold (for secondary Class 1 contributions),
and those limits and that threshold shall be the amounts specified for that year by regulations which, in the case of those limits, shall be made in accordance with subsections (2) and (3) below.”.
(2) For subsection (1) of section 6 of that Act (liability for Class 1 contributions) there shall be substituted the following subsection—
“(1) Where in any tax week earnings are paid to or for the benefit of an earner over the age of 16 in respect of any one employment of his which is employed earner’s employment—
(a)a primary Class 1 contribution shall be payable in accordance with this section and section 8 below if the amount paid exceeds the current lower earnings limit (or the prescribed equivalent in the case of earners paid otherwise than weekly); and
(b)a secondary Class 1 contribution shall be payable in accordance with this section and section 9 below if the amount paid exceeds the current earnings threshold (or the prescribed equivalent in the case of earners paid otherwise than weekly).”.
(3) For subsections (1) and (2) of section 8 of that Act (calculation of primary Class 1 contributions) there shall be substituted the following subsections—
“(1) Where a primary Class 1 contribution is payable, the amount of that contribution shall be the primary percentage of so much of the earner’s earnings paid in the tax week, in respect of the employment in question, as—
(a)exceeds the current lower earnings limit (or the prescribed equivalent); and
(b)does not exceed the current upper earnings limit (or the prescribed equivalent),
but this subsection is subject to regulations under section 6(5) above and sections 116 to 119 below and to section 37 of the Pensions Act (reduced rates of Class 1 contributions for earnings in contracted-out employment).
(2) For the purposes of this Act the primary percentage shall be 10 per cent., but the percentage is subject to alteration under section 129 of the Administration Act.”.
(4) For section 9 of that Act there shall be substituted the following section—
“9. Calculation of secondary Class 1 contributions.
(1) Where a secondary Class 1 contribution is payable, the amount of that contribution shall be the secondary percentage of so much of the earnings paid in the tax week, in respect of the employment in question, as exceeds the current earnings threshold (or the prescribed equivalent).
(2) For the purposes of subsection (1) above, the secondary percentage shall be 12.2 per cent., but the percentage is subject to alteration under section 129 of the Administration Act.
(3) Subsection (1) above is subject to regulations under section 6(5) above and sections 116 to 119 below and to section 37 of the Pensions Act.”.