NIM01545 - Class 1 Structural Overview: zero-rate of secondary NICs for Freeport and Investment Zone special tax site employees: assessment
If the Freeport or Investment Zone special tax site NICs relief is being claimed then the FUST or IZUST must be considered when calculating secondary Class 1 NICs.
Example 1
An employer claims the Freeport or Investment Zone relief for an employee whose earnings are £2,500 in the May 2024 pay period. Using the 2024 to 2025 tax year thresholds, the secondary NICs are calculated as:
- Identify the earnings up to the Secondary Threshold (ST) of £758 - no NICs are due on these earnings
- Identify the earnings between £758.01 and the monthly FUST or IZUST of £2,083 – no NICs are due on these earnings
- Identify the earnings above the monthly FUST or IZUST of £2,083 – NICs are due and the secondary NICs percentage rate is applied to earnings of £417
Example 2
An employer claims the Freeport or Investment Zone relief for an emplyee whose earnings are £2,000 in the June 2024 pay period. Using the 2024 to 2025 tax year thresholds, the secondary NICs are calculated as:
Identify the earnings up to the Secondary Threshold (ST) of £758 - no NICs are due on these earnings
Identify the earnings between £758.01 and the monthly FUST or IZUST of £2,083 – no NICs are due on these earnings
As the earnings are less than the monthly FUST or IZUST OF £2083, no secondary NICs are payable.