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National insurance

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puzzlemaniac | 23:06 Mon 23rd Aug 2010 | Personal Finance
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I understand that if someone gets a reduced rate mortgage from their employer then the interest difference will be reported as a benefit in kind, which will then impact on the personal allowance the following tax year by reducing the tax code.

Does that then also impact the NI contribution?

e.g. personal allowance £6475, interest difference to official rate, say, £1,200. Remaining allowance £5275. So tax code will be 527 instead of 647, so does that lowering of the tax code impact on NI, or is it calculated on basic salary regardless of tax ?
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Class 1 NI contributions are based solely upon gross pay, with no reference to Income Tax.

Chris
Chris is correct. Your Class 1 National Insurnace is completely separate from tax and your tax code has no impact on it.

The company will however be liable for Class 1A National Insurnace on your behalf for the value of the benefit in kind.
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Thanks for the replies.

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