National Insurance goes through an annual re-rating exercise and as part of this Social Security legislation is passed as part of the annual re-rating services.
The Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2026 do this for tax year 2026/27 and its effects can be broken down into two categories:
1. Confirmation of things that have changed; and
2. Confirmation of things that have not changed
The Changes
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Description
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Comment
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The Lower Earnings Limit (LEL)
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Increased from £125 to £129 per week
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The Small Profits Threshold (SPT)
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Increased from £6,845 to £7,105 per annum. This is the threshold over which Class 2 National Insurance Contributions (NICs) are treated as paid
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|
Class 2 NICs rate
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Increased from £3.50 to £3.65 per week
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Class 3 NICs rate
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Increased from £17.75 to £18.40 per week
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Zero-rate Secondary NICs for Armed Forces veterans
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This would have ended in April 2026; however, the relief is extended to tax years 2026/27 and 2027/28, then ended
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The Freezes
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Description
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Comment
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All payroll earnings limits and thresholds
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Apart from the Lower Earnings Limit (LEL), as all other are frozen
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Payroll rates (employee)
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Frozen at 8% standard, otherwise 2%
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Payroll rates (employer)
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Frozen at 15% on earnings above the applicable Secondary Threshold, for example, the Upper Secondary Threshold
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The Upper Profit Limit (UPL)
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Aligned with the Higher Rate threshold (£50,270) for Income Tax which is frozen
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For Bookkeepers
All this information has been relayed to members via the monthly Wages Wednesday webinars and will form part of ICB’s annual Rates and Allowances document.
