The government announced on 7th September changes to National Insurance in order to fund £12 billion a year to be spent on the NHS and social care across the UK.
Essentially, employees, employers and the self-employed will all see an increase of 1.25% in National Insurance contributions from April 2022 (i.e. 1.25p more in the pound). This is for one year only.
However, from April 2023, National Insurance will return to the current rate of 12% but the extra tax (i.e. the 1.25%) will be collected under a new Heath and Social Care levy. This will be split out and appear as a separate item on payslips.
The levy will be reported and collected through PAYE or Income Tax Self-Assessment for those employed or self-employed respectively – the same as the current procedures in place with HMRC.
It is understood that while state pensioners who are still working will not pay National Insurance, they will be expect to pay this new levy if they have employment income or self-employment profits above £9,568.
For further information and guidance regarding the National Insurance changes please contact us here at Arnold Hill for advice on 0207 306 9100 or email us at firstname.lastname@example.org
The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice. No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.