Advice + Tax + Accounts for smart business owners.
July 6th 2022

NIC threshold increase comes into effect

The increase in the primary National Insurance Contributions threshold comes into effect today, 6 July 2022.

At the Spring Statement in March, Rishi Sunak increased National Insurance thresholds for the 2022/23 tax year.

This means employees and self-employed people will pay National Insurance contributions on less of their income or profits.

The threshold increases by £2,690 from the current £9,880 to £12,570, equalising the primary NIC and income tax thresholds for the first time.

The £6bn tax cut will lift 2.2 million people out of paying any personal tax and will ensure people get to keep more of the money they earn.

The rise in the threshold will cut tax by an average £330 per worker on an annualised basis - however the introduction three months into the new tax year means that the actual average saving will be around £267.

This means that the primary threshold rises from £190 to £242, while the upper earnings limit remains unchanged at £967. All employees pay a lower rate of National Insurance of 3.25% above this point.

The secondary NIC threshold - the level at which employers start to pay NIC - remains the same throughout the 2022/23 tax year at £175/week or £9,100 for the year.

Following the introduction of health and social care levy, employees will pay National Insurance at 13.25%, representing a 1.25% surcharge on employees and employers from 6 April 2022; employers will now pay 15.05%.

SHARE
FREE CONSULTATION FORM

Let's talk

Book your free consultation now:

Preferred Method of Contact