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From April 2022, the contribution of social security will increase to strengthen state funds.
NOTE: You will not be affected by these changes if you’re above State Pension age and are not an employee or self-employed. Find out more information in the ‘If you’re above the State Pension age’ section.Briefly the changes
For the tax year 6 April 2022 to 5 April 2023 the employer contribution of class 1, class 1A, class 1B and class 4 will increase by 1.25% to help fund the NHS, health and social care..
From April 6, 2023, The National Insurance contribution rates will go back down to 2021 to 2022 levels, and the levy will become a separate new tax of 1.25%.
What does this mean in practice
f you are an employer, employee or self-employed, you will pay an additional 1.25% when contributing to social security. From April 6, 2023, this will be called a levy payable on:
▶ Class 1 that are above the primary and secondary thresholds
▶ Class 1A and Class 1B for employers
▶ Class 4 for the self-employed
The relevant tax will be collected by the HMRC through the PAYE and Self Assessment systems.
If you are self-employed, use the table below to determine if and when you will pay the relevant surcharge.
Self-employed type | Do I pay the 1.25 percentage points increase in National Insurance contributions for tax year 6 April 2022 to 5 April 2023? | Do I pay the separate 1.25% levy from 6 April 2023? |
|---|---|---|
I have profits more than the Lower Profits Limit for Class 4 National Insurance contributions | YES | YES |
I pay Class 2 National Insurance contributions only | No — the levy does not apply to Class 2 National Insurance contributions | No — the levy does not apply to Class 2 National Insurance contributions |
I’m above the State Pension age before 6 April 2022 with profits more than the Lower Profits Limit | No — because you do not pay National Insurance contributions | Yes — you must pay this using Self Assessment |
I reach State Pension age in the tax year 6 April 2022 to 5 April 2023 with profits more than the Lower Profit Limit | YES |
If you are an employee, use the table below to determine if and when you will pay the related surcharge.
Employee type | Do I pay the 1.25 percentage points increase in National Insurance contributions for tax year 6 April 2022 to 5 April 2023? | Do I pay the separate 1.25% levy from 6 April 2023? |
|---|---|---|
I pay Class 1 National Insurance contributions above the primary threshold | YES | YES |
I’m above the State Pension age and earn above the primary threshold | No — because you do not pay National Insurance contributions | YES |
If you are an employer
If your business pays National Insurance Contributions Category 1, Category 1A or Category 1B, you will have to start paying the contribution increased by 1.25 % from April 6, 2022. Then you will have to pay the separate contribution of 1, 25% from April 6, 2023 as α levy.
You may also need to pay the separate contribution from April 6, 2023 for employees who are over retirement age.
NOTES: In the employer's Payslip, when the relevant charge is made, a new note will be required: "1.25% uplift in NICs, NHS funds, health & social care.". After 2023, this note will have a new field in the software system as an additional contribution fee.For detailed information, simply easily arrange an online session with us.
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ATTENTION!
This article intends to give only a general informative picture and should not, in any case, be taken as a rule. It is strongly recommended to seek a full and professional guidance specifically for your circumstances before making any decisions.
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