Contractors should consider taking some simple steps to mitigate the impact of April's increase in National Insurance says contractor specialist giant group plc.
From April 6 2003, employers' NI will rise by 1% to 12.8% for all earnings over 89 per week, while employees' NI will increase by 1% to 11% on all earnings between 89 and 595 per week. Any earnings above 595 per week will be subject to an employees' NI rate of 1% (nil in 2002/03.
According to giant, the increase in NI could lead to significant falls in take home pay for contractors. A contractor with a 40,000 gross salary per year will see their take home pay fall by as much as 759 per annum - an increase of 354 employers' NI and 405 employees' NI.
Comments Matthew Brown, Managing Director of giant group plc: Many contractors will see a significant slice of their pay swallowed up by the rise in employers' and employees' NI.
This has come at a time when there is a lot of uncertainty in the market and contractors cannot afford to just sit back and watch their take home pay fall unnecessarily. They should be aware that there are some simple steps they can take to help them reduce the impact of the tax rise.
Contractors can mitigate impact of April's hikes in NI
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