NIM11047 - Calculating & recording Class 1
earnings, NICs & NIC rebates for 2003/04: Completion of forms
P11(2003-04) & P14(2003-04): Example 14: Contracted-out Money
Purchase (COMP) Scheme - earnings of £90 a week
In the example below, the weekly limits and thresholds for
2003-2004 have been used. These are:
- Lower Earnings Limit (LEL):
£77.00
- Earnings (ET): £89.00
- Upper Earnings Limit (UEL):
£595.00
Weekly earnings of £90.00
£90.00 - £89.00 = £1.00
| Employee’s NICs due | = £1.00 x 9.4% | = £0.094, rounded to |
| | £0.09 |
£89.00 - £77.00 = £12.00
| Employee’s NIC rebate due | = £12.00 x 1.6% | = £0.192, rounded to |
| | £0.19 |
| Net employee’s NICs due | = £0.09 - £0.19 | = £0.00 |
| Balance of employee’s NIC | |
| rebate available to the | |
| employer | = £0.10 |
| Employer’s NICs due | = £1.00 x 11.8% | = £0.118, rounded to |
| | £0.12 |
| Employer’s NIC rebate due | = £12.00 x 1% | = £0.12 |
| | + £0.10 |
| | balance of employee’s NIC rebate |
| | |
| | |
| | = £0.22 |
| Net employer’s NICs due | = £0.12 - £0.22 | = -£0.10 |
| Total NICs due | = £0.00 + -£0.10 | = -£0.10 |
Note
Where the employee’s NICs due are less than the value of
the employee’s NIC rebate due, only the value of the
employee’s NIC rebate equivalent to that of the
employee’s NICs due is paid to the employee. This, in effect,
will reduce the employee’s NICs to NIL. Any balance of the
employee’s NIC rebate is available to the employer.
Complete P11 as follows -
| 1a | 1b | 1c | 1d | 1e |
| £77 | £12 | £1 | R £0.10 | £0.00 |
Assuming earnings are the same for 52 weeks, complete P14 as
follows –
| 1a | 1b | 1c | 1d | 1e |
| £4004 | £624 | £52 | R £5.20 | £0.00 |
