NIC: All Change!

HMRC Changes to the National Insurance contributions for 2022-2023 tax year, are you confused?

Due to the COVID-19 strain on the NHS, the government announced that they would be increasing the National Insurance contributions by 1.25% as a means to increase spending on health and social care. The Health and Social Care Levy was applied on the 6th of April 2022 and asked all employers to add the following to the payslips “1.25% uplift in NICs, funds NHS, health and social care”.

In the Spring statement 2022, it was then also announced that the National Insurance thresholds would increase for the 2022-2023 tax year, however this would be in two stages:

• The primary threshold changes from 6th of April 2022 to 5th of July 2022 were set at £190 per week, £823 per month and £9,880 per year.
• These will then be changed from 6th of July to 5th April 2023 to £242 per week, £1,048 per month and £12,570 per year.

This brings the National Insurance threshold in line with the personal tax allowance. Directors on low salaries are set for the whole tax year at £229 per week £992.33 per month and £11,908 per year.

What does this mean for the employees? If you earn less than £35,000 for the 2022-2023 tax year you will pay less National insurance than compared to previous years.

A reminder that the Employers National Insurance Allowance has also increased from £4,000 to £5,000 per year for those eligible in the 2022-2023 tax year.

Struggling to keep up with changes and want to outsource your payroll, please do get in contact with our payroll department on 01353 662595.

Disclaimer - All information in this post was correct at time of writing.