Your November 2022 is going to change (yet again!) The reduction in the rate of National Insurance Contributions (NICs) and cancellation of the April 2023 Health and Social Care Levy

Expected NICs Changes from 6‌‌‌‌‌‌ ‌‌November 2022

The National Insurance rate was increased by 1.25% in April 2022 to fund health and social care. Following this, the NIC rate was to go back to the 2021-22 rates in April 2023 and be replaced by a new 1.25% Health and Social Care Levy.

However, in the first mini-budget from Kwasi Kwarteng, the government has:

Overruled the rise in National Insurance Contributions (NICs)
Done away with plans for the Health and Social Care Levy

National Insurance contribution (NIC) rate

From 6 November, the National Insurance contribution (NIC) rates will be cut by 1.25% for employees, employers and the self-employed. This cut will reverse the April 2022 declaration for the rest of the tax year. This cut will cover the following National insurance rates:

Class 1 NIC rates – for Employees (from 13.25% and 3.25% to earnings over £187 a week at a rate of 12% and then at 2% on all other earnings of more than £976 a week respectively ) and Employers (15.05% to 13.8%)
Class 1A from 15.05% to 13.8%
Class 1B from 15.05% to 13.8%
Class 4 (self-employed) – from 10.25% and 3.25% to 9% between £9,568 and £50,270 then 2% on anything above £50,270 respectively.

Social Care Levy

The Social Care Levy of 1.25% that was to be introduced from April 2023 in place of the 1.25% NIC rate increase has been cancelled.

What employers need to do

HMRC has asked employers and software developers to include a short-term generic message on payslips for the tax year (2022 to 2023) to explain the NIC changes. However, you (employer) must remove the message from payslips from 6‌‌‌‌‌‌ ‌‌November 2022 and action the new rates.

If you use the HMRC Basic PAYE tools, you don’t have to do anything because the software will automatically take account of these changes.

Need support?

Spondoo has a specialist team of payroll accountants who can help you become compliant with changing payroll and autoenrollment legislation. Please call us at 02033 259 341 or email info@spondoo.co.uk to get support for all your bookkeeping, accounting, and payroll needs.

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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.

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