National Insurance Contributions (Secondary Class 1 Contributions) Bill

1 Rate of secondary Class 1 contributions

(1)

In section 9(1A) of the Social Security Contributions and Benefits Act 1992,
after paragraph (aa) insert—

“(ab)

if the employer is a specified employer under subsection (1B),
the specified employer secondary percentage;”.

(2)

After section 9(1A) of that Act insert—

“(1B)

A “specified employer” means—

(a)

a person providing a care home service or a domiciliary support
service who is regulated under—

(i)

Part 1 of the Health and Social Care Act 2008,

(ii)

Part 1 of the Regulation and Inspection of Social Care
(Wales) Act 2016, or

(iii)

Part 5 of the Public Services Reform (Scotland) Act 2010,

(b)

a person contracted to provide primary care under the
provisions of—

(i)

Part 4 of the National Health Service Act 2006,

(ii)

Part 4 of the National Health Service (Wales) Act 2006,
or

(iii)

sections 17J to 17O of the National Health Service
(Scotland) Act 1978,

(c)

a person contracted to provide general dental services under
the provisions of Part 2 of the National Health Service (General
Dental Services) Regulations 1992,

(d)

a person contracted to provide pharmacy services under the
provisions of—

(i)

Part 7 of the National Health Service Act 2006, or

(ii)

Part 8 of the NHS (Pharmaceutical and Local
Pharmaceutical Services) Regulations 2013,

(e)

a charitable provider of health and care,

(f)

a person providing hospice care whether in a hospice or
elsewhere,

(g)

a carer to whom section 2(3A) of the National Insurance
Contributions Act 2014 applies,

(h)

a charity that has an annual revenue of less than £1 million,
or

(i)

a person providing transport for children with special
educational needs and disabilities.

(1C)

For the purposes of this Act, the specified employer secondary
percentage is 13.8%.”

(3)

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

(4)

The Social Security Contributions and Benefits (Northern Ireland) Act 1992
is amended as follows.

(5)

In section 9(1A) after paragraph (aa) insert—

“(ab)

if the employer is a specified employer under subsection (1B),
the specified employer secondary percentage;”.

(6)

After section 9(1A) insert—

“(1B)

A “specified employer” means—

(a)

a person providing a care home service or domiciliary support
service regulated under the Health and Personal Social Services
(Quality, Improvement and Regulation) (Northern Ireland)
Order 2003,

(b)

a person providing primary medical services through
contractual arrangements with a Health and Social Services
Board,

(c)

a person providing general dental services under Part 2 of the
General Dental Services (Northern Ireland) Regulations 1993,

(d)

a person providing pharmaceutical services under Part 2 of the
Pharmaceutical Services Regulations (Northern Ireland) 1997,

(e)

a provider of health and care registered as a charity by the
Charity Commission for Northern Ireland, or

(f)

a person providing hospice care whether in a hospice or
elsewhere.

(1C)

For the purposes of this Act, the specified employer secondary
percentage is 13.8%.”

(7)

In section 9(2) (equivalent provision for Northern Ireland), for “13.8%”
substitute “15%”.

(8)

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.

(2)

In regulation 10 (d) (the secondary threshold for secondary Class 1
contributions) for “£175” substitute “£96 or—

(a)

for a specified employer under section 9(1B) of the Social Security
Contributions and Benefits Act 1992, £175, or

(b)

for businesses and organisations with fewer than 25 full-time
employees, £175.”

(3)

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

(a)

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

“(i)

for a specified employer under section 9(1B) of the Social
Security Contributions and Benefits Act 1992, £758,

(ii)

for businesses and organisations with fewer than 25
full-time employees, £758, and

(iii)

in all other cases, £417”,

(b)

in sub-paragraph (b) , for “£9,100” substitute—

“(i)

for a specified employer under section 9(1B) of the Social
Security Contributions and Benefits Act 1992 or section
9(1B) of the Social Security Contributions and Benefits
(Northern Ireland) Act 1992, £9,100,

(ii)

for businesses and organisations with fewer than 25
full-time employees, £9,100, and

(iii)

in all other cases, £5,000”,

(c)

in sub-paragraph (c), for “the figure in sub-paragraph (b)” substitute—

“(i)

for businesses or organisations with 25 or more full-time
employees, £5,000, or

(ii)

for businesses or organisations with fewer than 25
full-time employees, £9,100”,

(d)

in sub-paragraph (d), for “the figure in sub-paragraph (b)” substitute—

“(i)

for businesses or organisations with 25 or more full-time
employees, £5,000, or

(ii)

for businesses or organisations with fewer than 25
full-time employees, £9,100”, and

(e)

in sub-paragraph (e), for “the figure in sub-paragraph (b)” substitute—

“(i)

for businesses or organisations with 25 or more full-time
employees, £5,000, or

(ii)

for businesses or organisations with fewer than 25
full-time employees, £9,100”.

(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.

(2)

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

(3)

At end of section 1(2)(b), insert “or,

(c)

for an employer in the early years sector, £20,000.”

(4)

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.

(5)

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

4 Review of effect on certain sectors

(1)

The Chancellor of the Exchequer must, within six months of the day on which
the Act is passed, lay before Parliament a review of the impact of the measures
contained in this Act on the persons and sectors in subsection (2).

(2)

The review must consider the impact on—

(a)

charities;

(b)

creative industries;

(c)

dentists;

(d)

early years providers;

(e)

farms;

(f)

general practitioners;

(g)

hospices;

(h)

hospitality;

(i)

pharmacies;

(j)

retail;

(k)

small businesses;

(l)

social care;

(m)

universities.

5 Short title

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