Pre-Budget Report 2009: national insurance to rise by 1% from April 2011

The Chancellor has announced a further 0.5% rise to the employee and employer rates of national insurance contributions from April 2011 on top of the 0.5% that has already been announced, in his 2009 Pre-Budget Report on 9 December. 

Other measures include:

  • a one-off 50% tax on any discretionary bonus above £25,000 paid by banks between now and 5 April 2010, to be paid by the bank, not the employee;

  • a 1% cap on pay settlements in the public sector from 2011 for two years, but with the "special circumstances" of the armed forces to be recognised; and

  • reforms to public sector pensions designed to save £1bn a year from 2012/13 onwards. 

See the HR & Compliance Centre Employment Intelligence blog for a summary of the Chancellor's speech. Further comment and analysis will be added as reactions come in. 

Also

Pre-Budget Report 2009 (on the Treasury website) Download all the official documentation from Pre-Budget Report 2009. 

Budget Report 2009: no silver lining IRS looks in detail at the Chancellor's 2009 Budget. 

Q&A: Bankers Bonuses are a potential minefield for employers Michael McCartney, senior associate at Dechert, looks at some of the legal issues that employers may face if they try to curb bonus payments.