Further changes to National Insurance Contributions (NIC) kick in from July this year and will be a welcome boost for most taxpayers who suffered an increase in April.<\/p>\n
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The threshold for paying the NI is rising from \u00a39,880 to \u00a312,570, saving taxpayers an average of \u00a3330 a year.<\/p>\n
National Insurance is calculated on gross earnings above a\u00a0threshold and from 6 April, employees, employers and the self-employed all had to pay extra.<\/p>\n
How will the changes work?<\/strong><\/p>\n For employees, the rise was 1.25p in the pound, taking it to 13.25 per cent from 12 per cent.<\/p>\n Previously, employers paid 13.8 per cent but this has risen to 15.05 per cent in April 2022.<\/p>\n Self-employed Class 4 rates have\u00a0increased by 1.25 percentage points to 10.25 per cent, while Class 2 rates are\u00a0charged at a flat rate of \u00a33.15 per week in 2022-23, up from \u00a33.05 in 2021-22.<\/p>\n The Government said the rise will help the NHS recover from the Covid pandemic and fund social care in England and will be in place until the new tax year, when it reverts to the old rate.<\/p>\n How will NI taxpayers benefit?<\/strong><\/p>\n A separate Health and Social Care Levy of 1.25 per cent will then be introduced and will be paid by everyone including people over state pension age who are still working. It will be deducted by employers at source in the same way as other taxes.<\/p>\n The Government says the extra money will initially go towards easing pressure on the NHS and then a proportion of it will be moved into the social care system.<\/p>\n Currently, the NI increase applies to everyone above a threshold of \u00a39,880 per year, but in July that threshold increases to match the income tax personal allowance of \u00a312,570.<\/p>\n As an example, in the 12 months from April 2022, anyone earning less than about \u00a334,000 will pay less NI than they did last year. Anybody earning more than that will pay more.<\/p>\n Those beyond the state retirement age of 66 and who are still working don\u2019t pay national insurance. However, from April 2023 the new 1.25 per cent levy will be deducted from their earnings.<\/p>\n For help and expert advice on National Insurance and other tax matters, contact us today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Further changes to National Insurance Contributions (NIC) kick in from July this year and will be a welcome boost for most taxpayers who suffered an increase in April.<\/p>\n","protected":false},"author":1,"featured_media":2232,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,11,25,62,8],"tags":[],"yoast_head":"\n\n