Reminder: National Insurance Increase April 2022
From 6 April 2022 National Insurance contributions are set to increase by 1.25%.
This increase is due to run until 5 April 2023 after which it will be replaced by 1.25% Health and Social Care Levy.
The increase and revenue raised will be spent on NHS, health and social care in the UK.
This applies to:
- Class 1 – paid by employees
- Class 4 – paid by self-employed
- Secondary Class 1, 1A and 1B – paid by employers
For those over the State Pension age the increase in National Insurance will not apply, however they will have to pay the 1.25% Health and Social Care Levy when that is introduced.
Employees National Insurance
For those employed, National Insurance will continue to be paid with tax and employers will deduct it from wages as part of the payroll process. Payslips will show the NIC contributions made.
Employers will be required to factor this into payroll from 6 April 2022.
Self-Employed National Insurance
For those self-employed paying Class 2 flat rate increased from £3.05 to £3.15. Class 4 National Insurance rate increased from 9% (above £9,568) to 10.25% (over £11,908) most will pay this directly through their self-assessment.
If profits are less than £6,725 a year from self-employment, those affected can pay voluntary contributions to avoid gaps in National Insurance records. Voluntary flat rate increased from £15.40 to £15.85 per week.
Tax advice from McKenzies
If you’re an employer or self-employed and you have any questions on the requirements for this tax change and what’s needed for future payslips, then contact our team of accountants who can help guide you on the necessary requirements for the next tax year.
We are Chartered Accountants in Oxted, Surrey. Our team of accountants are on hand to help you navigate personal tax returns including Employment Tax and Self-Assessment Tax.