Jersey To Hike Social Security Rates

by Jason Gorringe, Tax-News.com, London

28 July 2011

The States Assembly has approved an increase to Social Security contributions for employers of high-income earners.

From January 1, 2012, additional Social Security contributions will be paid on the earnings of employees who have incomes above the current ceiling of GBP44,232 per year. The new 2% contributions will be paid by employers on their employees’ earnings above GBP44,232 and up to GBP150,000 per year.

The change will also affect those who pay Class 2 contributions and have an income of more than GBP44,232 per year. Class 2 contributions are paid by the self-employed and by people without employment. They will also pay a 2% rate on income above the current ceiling.

The plans include a change to the system, which will allow the newly self-employed to base their contribution liability on the first two to three years of trading, using estimates of their current results, rather than previous years’ earnings. It is hoped that this will remove what is often cited as a disincentive for entrepreneurs considering their first step.

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