National Insurance changes

National Insurance Changes

The income threshold at which people have to start paying National Insurance changes on the 6th of July 2022. It’s one of the biggest National Insurance changes for years and increases the point at which you start paying it by £3,002 to £12,570

What exactly are the National Insurance changes?

For the tax year 2021- 2022, the “Class 1” national insurance threshold was £9,568 a year. If you earned less than this amount, you didn’t have to make national insurance contributions. If you earned more than that you did.

The income threshold at which you now have to start paying national insurance has been increased to £12,570 as of 6th of July 2022.

As a result some people will pay more National Insurance. Some people will actually pay less. Meaning more money in their pocket. In some cases up to £330 per year

To see how much you’ll pay check out this handy estimator tool from HMRC

Estimate how the National Insurance contributions changes will affect you – GOV.UK (www.gov.uk)

How much are the National Insurance changes?

National insurance rates have increased from 12 per cent to 13.25 per cent. This isn’t a rise of 1.25% as many have incorrectly stated or assumed. It’s actually an increase of 10.4% on the original 12%.

Why has it increased?

The Government have brought in the national insurance increase to help fund the NHS and a new health and social care levy.

It also includes the provision of care homes and personal care for those with disabilities or additional needs.

Help with the National Insurance changes

If you require any further information you can also search ‘Prepare for the Health and Social Care Levy’ on GOV.UK.

Or you can contact me if you need help with the National Insurance changes or any aspect of your Payroll