National Insurance increase to fund NHS and social care

Source: HM Revenue & Customs | | 08/09/2021

The Prime Minister announced increases in National Insurance Contributions (NIC) of 1.25% from April 2022, to contribute to increases in the NHS and social care budgets.

The increases will apply to:

  • Class 1 contributions (paid by employees). This is the NIC that is deducted from your earnings by your employer.
  • Class 4 (paid by self-employed). These contributions are added to your annual Self-Assessment statement.
  • Secondary Class 1 (paid by employers). Employer's NIC contributions are paid as part of the regular PAYE/NIC payments unless they are covered by the present £4,000 employment allowance.  

This increase will need to be factored into employers' budgets from April 2022. Self-employed persons will not see the impact of the increase until their Self-Assessment for 2022-23 is completed. 

From April 2023, these increases will be incorporated into a new Levy. Existing NICs reliefs to support employers will apply to the Levy. Companies employing apprentices under the age of 25, all people under the age of 21, veterans and employers in Freeports will not pay the Levy for these employees as long as their yearly gross earnings are less than £50,270, or £25,000 for new Freeport employees. The Levy will be administered by HMRC and collected by the current channels for NICs – Pay As You Earn and Income Tax Self-Assessment. The Levy, including the temporary NICs increase in 2022, will be legislated for shortly.



Contact Us

8-10 Queen Street
Seaton
Devon
EX12 2NY
Tel: 01297 624188

Also in Exeter

21 Heavitree Road
Exeter
Devon
EX1 2LD
Tel: 01392 823999

 

Cookie Policy

Latest News

Have you claimed your Child Trust Fund cash?
14/10/2021 - More...
Young persons who turned 18 on or after 1 September 2020 may have cash waiting in a dormant Child Trust Fund (CTF)

Letting agencies and the Money Laundering Regulations
14/10/2021 - More...
HMRC is responsible for the money laundering supervision of certain businesses including letting agencies. Businesses

Don’t miss out on this tax allowance
14/10/2021 - More...
If you are entitled to the marriage allowance and have not yet applied, then you could receive a payment of up to £1,220

News Search


Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login